Export Administration Regulations: Removal of License Requirements for Certain Spacecraft and Related Items for Australia, Canada, and the United Kingdom

SUPPLEMENTARY INFORMATION:

I. Background

A. National Space Council Direction To Review Space Export Controls

On December 20, 2023, the National Space Council convened to discuss U.S. leadership in space. The Department of State and the Department of Commerce (Commerce) were subsequently tasked to “conduct a review of space export controls to enable a globally competitive U.S. space industrial base while protecting our national security and foreign policy interests” (see The White House FACT SHEET: Strengthening U.S. International Space Partnerships released on December 20, 2023). The changes being made in the final rule will better enable a globally competitive U.S. space industrial base while protecting our national security and foreign policy interests for exports and reexports to Australia, Canada, and the United Kingdom.

B. Commerce Response to the National Space Council Directed Review of Space Export Controls

This final rule is part of Commerce's regulatory response to this direction from the National Space Council to review relevant export controls and processes to better enable a globally competitive U.S. space industrial base while protecting our national security and foreign policy interests. This final rule makes important changes to EAR spacecraft and related items controls to better rationalize the controls and facilitate collaboration with three close allies of the United States and participants in the NTIB (10 U.S.C. 4801(1)), namely Australia, Canada, and the United Kingdom. Specifically, the changes in this rule will better enable a globally competitive U.S. space industrial base while protecting our national security and foreign policy interests by facilitating license-free trade in certain remote sensing and space-based logistics, assembly, and servicing spacecraft and technology with these close allies.

This final rule removes Australia, Canada, and the United Kingdom from the worldwide license requirement for such items and makes conforming changes to Export Control Classification Numbers (ECCNs) 9A515 and 9E515. In so doing, this final rule builds upon an interim final rule published on April 19, 2024 (89 FR 28594), which removed certain license requirements for Australia and the United Kingdom, and more closely aligned treatment of those countries with that of Canada, by streamlining space commerce with all three nations. This final rule represents just one line of effort in Commerce's response to the National Space Council direction to review space export controls, including this final rule being published concurrently with a Commerce interim final rule, “Export Administration Regulations: Revisions to Space-Related Export Controls” (RIN 0694-AJ87) and a Commerce proposed rule “ Export Administration Regulations: Revisions to Space-Related Export Controls, Including Addition of License Exception Commercial Space Activities (CSA)” (RIN 0694-AH66) that build on advanced notices of proposed rulemaking published on March 8, 2019 (84 FR 8485 and 84 FR 8486).

II. Changes to the EAR

A. Removing Australia, Canada, and the United Kingdom, From a Worldwide License Requirement for Certain Spacecraft and Related Items

In 15 CFR 742.6 (Regional stability), this final rule revises paragraph (a)(9) ( Special RS Column 1 license requirement applicable to certain spacecraft and related items), which prior to this final rule imposed a worldwide license requirement for spacecraft and related items classified under ECCN 9A515.a.1, a.2, a.3, a.4, .g, and ECCN 9E515.f. These spacecraft and related items involve remote sensing or space-based logistics, assembly, or servicing, and so prior to this final rule were subject to a worldwide license requirement, including for exports and reexports to Australia, Canada, and the United Kingdom. However, taking into account the close relations with the U.S. and these three allied countries, including in space collaboration as well as with the U.S. defense industrial base, as demonstrated by their inclusion in the NTIB, this final rule removes the license requirement for such items when destined to these countries. The removal of such license requirements for Australia, Canada, and the United Kingdom aligns the EAR's requirements with interagency licensing practice, as BIS has not denied a license application for such items to these three allied countries in the past five years.

BIS estimates the removal of this license requirement for Australia, Canada, and the United Kingdom under § 742.6(a)(9) will result in a reduction of 90 license applications being submitted to BIS annually.

B. Conforming Changes for Removal of License Requirement for Australia, Canada, and the United Kingdom

This final rule makes two conforming changes to other parts of the EAR to reflect the removal of the license requirement for Australia, Canada, and the United Kingdom under § 742.6(a)(9) for spacecraft and related items classified under ECCN 9A515.a.1, a.2, a.3, a.4, .g, and ECCN 9E515.f. Specifically, in supplement no. 1 to part 774—Commerce Control List, this final rule revises ECCNs 9A515 and 9E515. This final rule revises the License Requirement Note in ECCNs 9A515 and 9E515 to reflect that this final rule removes Australia, Canada, and the United Kingdom from the scope of the worldwide license requirement described in the License Requirement Note included in each of these respective ECCNs, as described further in section II.A and B.

The License Requirement Note in ECCN 9A515 specifies that the Commerce Country Chart in supplement no. 1 to part 738 is not used for determining license requirements for commodities classified in ECCN 9A515.a.1, a.2, a.3, a.4, and .g. The License Requirement Note in ECCN 9A515 includes a second sentence that directs exporters and reexporters to see § 742.6(a)(9), which specifies that such commodities are subject to a worldwide license requirement. This final rule revises the second sentence of the License Requirement Note in ECCN 9A515 to add the phrase “except to Australia, Canada, and the United Kingdom,” to specify that exports and reexports to these countries now excluded from the scope of this worldwide license requirement.

The License Requirement Note in ECCN 9E515 specifies that the Commerce Country Chart is not used for determining license requirements for “technology” classified ECCN 9E515.f. The License Requirement Note in ECCN 9E515 includes a second sentence that directs exporters and reexporters to see § 742.6(a)(9), which specifies that such “technology” is subject to a worldwide license requirement. This final rule revises the second sentence of the License Requirement Note in ECCN 9E515 to add the phrase “except to Australia, Canada, and the United Kingdom,” to specify that exports and reexports to these countries are now excluded from the scope of this worldwide license requirement.

Export Control Reform Act of 2018

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (codified, as amended, at 50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. In particular, and as noted elsewhere, Section 1753 of ECRA (50 U.S.C. 4812) authorizes the regulation of exports, reexports, and transfers (in-country) of items subject to U.S. jurisdiction. Further, Section 1754(a)(1)-(16) of ECRA (50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, the establishment of a list of controlled items; the prohibition of unauthorized exports, reexports, and transfers (in-country); the requirement of licenses or other authorizations for exports, reexports, and transfers (in-country) of controlled items; apprising the public of changes in policy, regulations, and procedures; and any other action necessary to carry out ECRA that is not otherwise prohibited by law. Pursuant to Section 1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a final rule without prior notice and comment.

Rulemaking Requirements

1. Executive Orders 12866, 13563, and 14094 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and distributive impacts and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits and of reducing costs, harmonizing rules, and promoting flexibility. This final rule has been designated as significant under Executive Order 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 of 1995 (PRA) (44 U.S.C. 3501 et seq.), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule involves the following OMB-approved collections of information subject to the PRA:

• 0694-0088, “Multi-Purpose Application,” which carries a burden hour estimate of 29.4 minutes for a manual or electronic submission;
• 0694-0096 “Five Year Records Retention Period,” which carries a burden hour estimate of less than 1 minute;
• 0694-0122, “Licensing Responsibilities and Enforcement;” and
• 0607-0152 “Automated Export System (AES) Program,” which carries a burden hour estimate of 3 minutes per electronic submission.

This rule changes the respondent burden for control number 0694-0088 by reducing the estimated number of submissions by 90, which is expected to reduce the current approved estimates, which will result in a reduction of 44 burden hours saved and cost savings to the public of $1,672 under this collection. The respondent burden under controls numbers 0694-0096 and 0607-0152 are not anticipated to change as a result of this final rule. Current information regarding all three collections of information—including all background materials—can be found at: https://www.reginfo.gov/public/do/PRAMain by using the search function to enter either the title of the collection or the OMB Control Number.

3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to section 1762 of ECRA (50 U.S.C. 4821), this action is exempt from the Administrative Procedure Act (APA) (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date. While section 1762 of ECRA provides sufficient authority for such an exemption, this action is also independently exempt from these APA requirements because it involves a military or foreign affairs function of the United States (5 U.S.C. 553(a)(1)).

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601, et seq.) are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

For the reasons stated in the preamble, parts 742 and 774 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows:

1. The authority citation for part 742 continues to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; Notice of November 1, 2023, 88 FR 75475 (November 3, 2023).

2. Section 742.6 is amended by revising paragraph (a)(9) to read as follows:

3. The authority citation for part 774 continues to read as follows:

Authority: 50 U.S.C. 4801-4852; 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 8720; 10 U.S.C. 8730(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 42 U.S.C. 2139a; 15 U.S.C. 1824; 50 U.S.C. 4305; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783.

4. Supplement no. 1 to part 774 is amended by revising ECCNs 9A515 and 9E515, to read as follows:

SUPPLEMENT NO. 1 TO PART 774—THE COMMERCE CONTROL LIST

9A515 “Spacecraft” and related commodities, as follows (see List of Items Controlled). License Requirements

Reason for Control: NS, RS, MT, AT