Pt. 770 15 CFR Ch. VII (1–1–16 Edition) (vii) Evidence that the parts and compo- SUPPLEMENT NO. 2 TO PART 768—ITEMS nents of the item are of foreign origin or are ELIGIBLE FOR EXPEDITED LICENSING exempt from U.S. licensing requirements by PROCEDURES [RESERVED] the parts and components provision § 732.4 of the EAR. (3) Sufficient quantity: PART 770—INTERPRETATIONS (i) Evidence that foreign sources have the item in serial production; Sec. (ii) Evidence that the item or its product is 770.1 Introduction. used in civilian applications in foreign coun- 770.2 Item interpretations. tries; 770.3 Interpretations related to exports of (iii) Evidence that a foreign country is technology and software to destinations marketing in the specific country an item of in Country Group D:1. its indigenous manufacture; AUTHORITY: 50 U.S.C. app. 2401 et seq.; 50 (iv) Evidence of foreign inventories of the U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 item; CFR, 2001 Comp., p. 783; Notice of August 7, (v) Evidence of excess capacity in a foreign 2015, 80 FR 48233 (August 11, 2015). country’s production facility; (vi) Evidence that foreign countries have § 770.1 Introduction. not targeted the item or are not seeking to In this part, references to the EAR purchase it in the West; are references to 15 CFR chapter VII, (vii) An estimate by a knowledgeable subchapter C. This part provides com- source of the foreign country’s needs; or modity, technology, and software in- (viii) An authoritative analysis of the worldwide market (i.e., demand, production terpretations. These interpretations rate for the item for various manufacturers, clarify the scope of controls where such plant capacities, installed tooling, monthly scope is not readily apparent from the production rates, orders, sales and cumu- Commerce Control List (CCL) (see Sup- lative sales over 5–6 years). plement No. 1 to part 774 of the EAR) (4) Comparable quality: and other provisions of the Export Ad- (i) A sample of the foreign item; ministration Regulations. (ii) Operation or maintenance manuals of the U.S. and foreign items; § 770.2 Item interpretations. (iii) Records or a statement from a user of (a) Interpretation 1: Anti-friction bear- the foreign item; (iv) A comparative evaluation, preferably ing or bearing systems and specially de- in writing, of the U.S. and foreign items by, signed parts. (1) Anti-friction bearings for example, a western producer or purchaser or bearing systems shipped as spares or of the item, a recognized expert, a reputable replacements are classified under Ex- trade publication, or independent laboratory; port Control Classification Number (v) A comparative list identifying, by man- (ECCN) 2A001 (ball, roller, or needle- ufacturers and model numbers, the key per- roller bearings and parts). This applies formance components and the materials used to separate shipments of anti-friction in the item that qualitatively affect the per- bearings or bearing systems and anti- formance of the U.S. and foreign items; friction bearings or bearing systems (vi) Evidence of the interchangeability of U.S. and foreign items; shipped with machinery or equipment (vii) Patent descriptions for the U.S. and for which they are intended to be used foreign items; as spares or replacement parts. (viii) Evidence that the U.S. and foreign (2) An anti-friction bearing or bear- items meet a published industry, national, or ing system physically incorporated in a international standard; segment of a machine or in a complete (ix) A report or eyewitness account, by machine prior to shipment loses its deposition or otherwise, of the foreign item’s identity as a bearing. In this scenario, operation; the machine or segment of machinery (x) Evidence concerning the foreign manu- containing the bearing is the item sub- facturers’ corporate reputation; ject to export control requirements. (xi) Comparison of the U.S. and foreign end (3) An anti-friction bearing or bear- item(s) made from a specific commodity, tool(s), device(s), or technical data; or ing system not incorporated in a seg- (xii) Evidence of the reputation of the for- ment of a machine prior to shipment, eign item including, if possible, information but shipped as a component of a com- on maintenance, repair, performance, and plete unassembled (knocked-down) ma- other pertinent factors. chine, is considered a component of a 704 VerDate Sep<11>2014 16:54 Feb 03, 2016 Jkt 238052 PO 00000 Frm 00714 Fmt 8010 Sfmt 8010 Q:\15\15V2.TXT 31 lpowell on DSK54DXVN1OFR with $$_JOB Bureau of Industry and Security, Commerce § 770.2 machine. In this scenario, the complete the machine tool and the control unit machine is the item subject to export are classified separately. If either the license requirements. machine tool or the control unit re- (b) Interpretation 2: Classification of quires a license, then the entire unit ‘‘parts’’ of machinery, equipment, or other requires a license. If either a machine items—(1) An assembled machine or unit tool or a control unit is exported sepa- of equipment is being exported. In in- rately from the system, the exported stances where one or more assembled component is classified on the license machines or units of equipment are application without regard to the other being exported, the individual compo- parts of a possible system. nent parts that are physically incor- (ii) When preparing the Electronic porated into the machine or equipment Export Information (EEI) on the Auto- do not require a license. The license or mated Export System (AES), a system general exception under which the being shipped complete (i.e., machine complete machine or unit of equipment and control unit), should be reported is exported will also cover its compo- under the Schedule B number for each nent parts, provided that the parts are machine. When either a control unit or normal and usual components of the a machine is shipped separately, it machine or equipment being exported, should be reported under the Schedule or that the physical incorporation is B number appropriate for the indi- not used as a device to evade the re- vidual item being exported. quirement for a license. (f) Interpretation 6: ‘‘Parts,’’ ‘‘acces- (2) Parts are exported as spares, re- sories,’’ and equipment exported as scrap. placements, for resale, or for stock. In in- ‘‘Parts,’’ ‘‘accessories,’’ or equipment stances where parts are exported as that are being shipped as scrap should spares, replacements, for resale, or for be described on the EEI filing to the stock, a license is required only if the AES in sufficient detail to be identified appropriate entry for the part specifies under the proper ECCN. When commod- that a license is required for the in- ities declared as ‘‘parts,’’ ‘‘acces- tended destination. sories,’’ or equipment are shipped in (c) [Reserved] bulk, or are otherwise not packaged, (d) Interpretation 4: Telecommuni- packed, or sorted in accordance with cations equipment and systems. Control normal trade practices, the Customs equipment for paging systems (broad- Officer may require evidence that the cast radio or selectively signalled re- shipment is not scrap. Such evidence ceiving systems) is defined as circuit may include, but is not limited to, bills switching equipment in Category 5 of of sale, orders and correspondence indi- the CCL. cating whether the commodities are (e) Interpretation 5: Numerical control scrap or are being exported for use as systems—(1) Classification of ‘‘Numerical ‘‘parts,’’ ‘‘accessories,’’ or equipment. Control’’ Units. ‘‘Numerical control’’ (g) Interpretation 7: Scrap arms, ammu- units for machine tools, regardless of nition, and implements of war. Arms, their configurations or architectures, ammunition, and implements of war, are controlled by their functional char- as defined in the U.S. Munitions List, acteristics as described in ECCN and are under the jurisdiction of the 2B001.a. ‘‘Numerical control’’ units in- U.S. Department of State (22 CFR parts clude computers with add-on ‘‘motion 120 through 130), except for the fol- control boards’’. A computer with add- lowing, which are under the jurisdic- on ‘‘motion control boards’’ for ma- tion of the Department of Commerce: chine tools may be controlled under (1) Cartridge and shell cases that ECCN 2B001.a even when the computer have been rendered useless beyond the alone without ‘‘motion control boards’’ possibility of restoration to their origi- is not subject to licensing require- nal identity by means of excessive ments under Category 4 and the ‘‘mo- heating, flame treatment, mangling, tion control boards’’ are not controlled crushing, cutting, or by any other under ECCN 2B001.b. method are ‘‘scrap’’. (2) Export documentation requirement. (2) Cartridge and shell cases that (i) When preparing a license applica- have been sold by the armed services as tion for a numerical control system, ‘‘scrap’’, whether or not they have been 705 VerDate Sep<11>2014 16:54 Feb 03, 2016 Jkt 238052 PO 00000 Frm 00715 Fmt 8010 Sfmt 8010 Q:\15\15V2.TXT 31 lpowell on DSK54DXVN1OFR with $$_JOB § 770.2 15 CFR Ch. VII (1–1–16 Edition) heated, flame-treated, mangled, 2-Chloro-1-ethanol crushed, cut, or reduced to scrap by Chloroethanol any other method. 2-Chloroethyl alcohol (3) Other commodities that may have Ethene chlorohydrin been on the U.S. Munitions List are Ethylchlorohydrin ‘‘scrap’’, and therefore under the juris- Ethylene chlorhydrin diction of the Department of Com- Ethylene chlorohydrin merce, if they have been rendered use- Glycol chlorohydrin less beyond the possibility of restora- Glycol monochlorohydrin tion to their original identity only by 2-Hydroxyethyl chloride means of mangling, crushing, or cut- (5) (C.A.S. #78–38–6) Diethyl ting. When in doubt as to whether a ethylphosphonate Ethylphosphonic commodity covered by the Munitions acid diethyl ester List has been rendered useless, export- (6) (C.A.S.