Rule2023-17243
Expansion of Nuclear Nonproliferation Controls on the People's Republic of China and Macau
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 14, 2023
Effective
August 11, 2023
Issuing agencies
Commerce DepartmentIndustry and Security Bureau
Abstract
In response to the People's Republic of China's (China) military modernization efforts, military-civil fusion strategy, and expansion of its nuclear forces, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) by adding additional nuclear nonproliferation controls on China and Macau. This change specifically applies to items controlled for Nuclear Nonproliferation (NP) column 2 reasons for control. These controls enhance U.S. Government efforts to monitor the export of these items and to ensure they are only being used in peaceful activities such as commercial nuclear power generation, medical developments, production of or use in medicine, and non-military industries.
Full Text
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<title>Federal Register, Volume 88 Issue 155 (Monday, August 14, 2023)</title>
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[Federal Register Volume 88, Number 155 (Monday, August 14, 2023)]
[Rules and Regulations]
[Pages 54875-54877]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-17243]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 738 and 742
[Docket No. 230807-0186]
RIN 0694-AJ25
Expansion of Nuclear Nonproliferation Controls on the People's
Republic of China and Macau
AGENCY: Bureau of Industry and Security, Department of Commerce.
ACTION: Final rule.
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SUMMARY: In response to the People's Republic of China's (China)
military modernization efforts, military-civil fusion strategy, and
expansion of its nuclear forces, the Bureau of Industry and Security
(BIS) is amending the Export Administration Regulations (EAR) by adding
additional nuclear nonproliferation controls on China and Macau. This
change specifically applies to items controlled for Nuclear
Nonproliferation (NP) column 2 reasons for control. These controls
enhance U.S. Government efforts to monitor the export of these items
and to ensure they are only being used in peaceful activities such as
commercial nuclear power generation, medical developments, production
of or use in medicine, and non-military industries.
DATES: This rule is effective August 11, 2023.
FOR FURTHER INFORMATION CONTACT: Steven Clagett, Director, Nuclear and
Missile Technology Controls Division, tel. (202) 482-1641 or email
<a href="/cdn-cgi/l/email-protection#6310170615060d4d000f020406171723010a104d070c004d040c15"><span class="__cf_email__" data-cfemail="a9daddccdfccc787cac5c8ceccdddde9cbc0da87cdc6ca87cec6df">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
Existing Nuclear Nonproliferation Export Controls
The multilateral Nuclear Suppliers Group (NSG) comprises nuclear
supplier countries that seek to contribute to the nonproliferation of
nuclear weapons through the implementation of two sets of guidelines
for nuclear exports and nuclear-related exports. The first set of NSG
guidelines applies to exports of nuclear material, equipment, and
technology generally subject to the export licensing jurisdiction of
the Nuclear Regulatory Commission (NRC) and the Department of Energy.
The second set of NSG guidelines applies to exports of nuclear-related
dual-use items, which are subject to the Export Administration
Regulations (EAR) (15 CFR parts 730-774), administered by the
Department of Commerce, Bureau of Industry and Security (BIS). Such
items are listed on the Commerce Control List (CCL) (supplement no. 1
to part 774) and controlled for nuclear nonproliferation column 1 (NP1)
reasons (see Sec. 742.3(a)(1)). Items controlled for NP1 reasons
require a license to all destinations except NSG member countries
listed in Country Group A:4 (see supplement no. 1 to part 740).
In addition to implementing the multilateral NP1 controls, BIS
controls certain additional items unilaterally for nuclear
nonproliferation reasons. Such items are listed on the CCL and
controlled for nuclear nonproliferation column 2 (NP2) reasons (see
Sec. 742.3(a)(2)). These items require a license when destined to
Country Group D:2 (supplement no. 1 to part 738) countries, and with
this rule, to the People's Republic of China (China) or Macau. (Note:
Effective December 23, 2020, BIS removed Hong Kong as a separate
destination under the EAR; accordingly, licensing requirements for
China apply to all exports and reexports to, as well as transfers
within, Hong Kong (see 85 FR 83765)). Items controlled for NP2 reasons
are listed in Export Control Classification Numbers (ECCNs) 1A290,
1C298, 2A290, 2A291, 2D290, 2E001, 2E002, and 2E290. Items controlled
under these ECCNs include, for example, depleted uranium, graphite and
deuterium for non-nuclear end use, and generators and other equipment
for nuclear plants. Deuterium and graphite for nuclear end use is
subject to NRC export licensing jurisdiction pursuant to 10 CFR part
110.
Nuclear Nonproliferation Export Controls Applicable to China and Macau
Prior to This Rule
Although China is a NSG member country, it is not listed in Country
Group A:4 (supplement no. 1 to part 740). Accordingly, a license is
required, as specified on the Commerce Country Chart (supplement no. 1
to part 738), for items controlled for NP1 reasons to China. Likewise,
a license is required for items controlled for NP1 reasons to Macau, a
special administrative region of China. Prior to this rule, neither
China nor Macau were subject to NP2 reasons for control. However,
pursuant to Sec. 744.21, some items controlled for NP2 reasons and
listed in supplement no. 2 to part 744 require a license when destined
to a `military end use' or a `military end user' in China.
In addition to list-based license requirements for nuclear-related
dual-use items, BIS implements end use and end user controls to
restrict the export, reexport, and transfer (in-country) of items to or
within China and Macau for nuclear nonproliferation and certain
maritime nuclear propulsion reasons. Pursuant to Sec. 744.2 of the
EAR, a license is required for the export, reexport, or transfer (in-
country) to or within China and Macau when there is ``knowledge'' (as
that term is defined in part 772 of the EAR) that the item will be used
directly or indirectly in nuclear explosive activities, unsafeguarded
nuclear activities, or safeguarded or unsafeguarded nuclear fuel cycle
activities. In addition, pursuant to Sec. 744.5 of the EAR, a license
is required for the export, reexport, or transfer (in-country) to or
within China and Macau when there is ``knowledge'' the item is for use
in a maritime nuclear propulsion project. These provisions are not
affected by this final rule.
Recent U.S. Government Reaction to and Analysis of Chinese Nuclear
Activities
BIS has added entities in China to the Entity List for reasons
related to military modernization and nuclear weapons. As one example,
on June 5, 2020, BIS added to the Entity List ten entities
[[Page 54876]]
owned by, operated by, or directly affiliated with the Chinese Academy
of Engineering Physics (CAEP), which is the technology complex
responsible for the research, development and testing of China's
nuclear weapons and has been listed on the Entity List since June 30,
1997. See 85 FR 34495. Also, on August 14, 2019, BIS added four Chinese
entities, China General Nuclear Power Group, China General Nuclear
Power Corporation (CGNPC), China Nuclear Power Technology Research
Institute Co. Ltd., and Suzhou Nuclear Power Research Institute Co.
Ltd., because each of these four Chinese entities has engaged in or
enabled efforts to acquire advanced U.S. nuclear technology and
material for diversion to military uses in China. See 84 FR 40237. The
Entity List restricts the export, reexport, or transfer (in-country) of
all items subject to the EAR to these entities. License applications
involving such entities are reviewed with a presumption of denial.
BIS has continued to take action to address escalating concerns
about China's nuclear activities. On October 7, 2022, BIS implemented
restrictions on the export of certain advanced computing items to China
and imposed additional restrictions on certain entities on the Entity
List. Four of those entities were determined to be involved with
supercomputers in China that are believed to be used in nuclear
explosive activities. See 87 FR 62186, at 62187. The October 7 rule
specifically noted a U.S. intelligence community assessment that China
``will continue the most rapid expansion and platform diversification
of its nuclear arsenal in its history, intending to at least double the
size of its nuclear stockpile during the next decade and to field a
nuclear triad and is building a larger and increasingly capable nuclear
missile force that is more survivable, more diverse, and on higher
alert than in the past, including nuclear missile systems designed to
manage regional escalation and ensure an intercontinental second-strike
capability.'' Id. (internal quotations marks omitted). The restrictions
imposed in that rule were intended to ``protect U.S. national security
and foreign policy interests by restricting [China's] access to
advanced computing for its military modernization, including nuclear
weapons development . . .'' Id. at 62186.
According to the United States Department of Defense (DoD) report,
Military and Security Developments Involving the People's Republic of
China also known as the China Military Power Report, published on
November 29, 2022 (see <a href="https://www.defense.gov/CMPR/">https://www.defense.gov/CMPR/</a>), China has a
decade-long target to modernize, diversify, and expand its nuclear
forces as well as a long-term military-civil fusion strategy. China's
continued nuclear expansion and military-civil fusion strategy pose a
concern to global and regional stability. In light of China's
objectives to build an integrated national strategic system by
developing and acquiring advanced dual-use items for military purposes,
fusing its defense industrial base with its civilian technology
industrial base, building military requirements into civilian
infrastructure, and leveraging civilian construction for military
purposes, BIS has determined it is necessary to enhance nuclear
nonproliferation export controls.
Expansion of Nuclear Nonproliferation Export Controls on the People's
Republic of China and Macau
In this final rule, BIS is expanding the scope of nuclear-related
export controls applicable to China and Macau. This change is necessary
to protect U.S. national security and foreign policy interests by
imposing a license requirement to China and Macau on items that could
contribute to nuclear activities of concern. These controls are being
put in place to further allow the U.S. Government to monitor the export
of these items to assure that they are only being used in peaceful
activities such as commercial nuclear power generation, medical
developments, production of or use in medicine, and non-military
related industries. The specific regulatory changes are detailed below.
For purposes of the EAR, this rule does not change the status of
Macau; it will continue to be treated as a separate destination from
China. According to the U.S. Department of State's fact sheet, U.S.
Relations with Macau, Bilateral Relations Fact Sheet of June 1, 2021
(see <a href="https://www.state.gov/u-s-relationswith-macau/">https://www.state.gov/u-s-relationswith-macau/</a>), Macau has been a
Special Administrative Region of China since 1999, when it was returned
to Chinese sovereignty from Portuguese administration; therefore, its
foreign relations and defense are the responsibility of China. China
grants Macau limited autonomy in economic and commercial relations.
U.S. policy toward Macau is grounded in the U.S. Macau Policy Act of
1999 and reflects U.S. support for Macau's autonomy under the ``One
Country, Two Systems'' framework established in Macau's Basic Law.
Because of Macau's position as a Special Administrative Region of
China, and the potential risk of diversion of items subject to the EAR
from Macau to China, this rule adds Macau as a destination to which a
license will be required to prevent the diversion to China of items
determined to be critical to protecting U.S. national security and
foreign policy interests.
Part 738
This final rule applies NP2 reasons for control to China and Macau
in the Commerce Country Chart (supplement no. 1 to part 738). This
imposes a license requirement for NP2 controlled items destined for
China or Macau.
Part 742
As a conforming change, this final rule adds China and Macau to
Sec. 742.3(a)(2) to impose the license requirements on the NP2
controlled items. License applications for items controlled for NP2
reasons to China and Macau will be reviewed in accordance with the
license review policies set forth in Sec. 742.3(b)(3) and (4) of the
EAR. BIS is also using this rule to revise the language of paragraph
(a)(2) to ensure its clarity.
Another U.S. Government agency is putting forward a nuclear export-
related action as well. The NRC is publishing a separate notice of
issuance of an order affecting general licenses for exports of special
nuclear material, source material, and deuterium for nuclear end use to
China issued under 10 CFR 110.21, 110.22, and 110.24, respectively.
Saving Clause
For the changes being made in this final rule, shipments of items
removed from eligibility for a License Exception or export, reexport,
or transfer (in-country) without a license (NLR) as a result of this
regulatory action that were en route aboard a carrier to a port of
export, reexport, or transfer (in-country), on August 11, 2023,
pursuant to actual orders for export, reexport, or transfer (in-
country) to or within a foreign destination, may proceed to that
destination under the previous eligibility for a License Exception or
export, reexport, or transfer (in-country) without a license (NLR),
provided the export, reexport, or transfer (in-country) is completed no
later than on September 11, 2023.
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), 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.
[[Page 54877]]
Rulemaking Requirements
1. Executive Orders 13563 and 12866 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, distribute impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has been determined to be significant
under Executive Order 12866.
2. Notwithstanding any other provision of law, no person may be
required to respond to or 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 (44 U.S.C. 3501 et seq.) (PRA), unless
that collection of information displays a currently valid Office of
Management and Budget (OMB) Control Number. This regulation involves a
collection currently approved by OMB under control number 0694-0088,
Simplified Network Application Processing System. This collection
includes, among other things, license applications, and carries a
burden estimate of 29.4 minutes for a manual or electronic submission
for a total burden estimate of 31,919 hours. BIS expects an increase of
588 burden hours for this collection.
3. This rule does not contain policies with federalism implications
as that term is defined under Executive Order 13132.
4. Pursuant to section 1762 of the Export Control Reform Act of
2018, this action is exempt from the Administrative Procedure Act (5
U.S.C. 553) requirements for notice of proposed rulemaking, opportunity
for public participation, and delay in effective date. The Department
of Commerce finds that there is good cause under 5 U.S.C. 553(b)(B) to
waive the provisions of the Administrative Procedure Act requiring
prior notice and the opportunity for public comment because they are
unnecessary. This rule does not alter any right, obligation or
prohibition that applies to any person under the EAR. Because neither
the Administrative Procedure Act nor any other law requires that notice
of proposed rulemaking and an opportunity for public comment be given
for this rule, the analytical requirements of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable. Accordingly,
no Final Regulatory Flexibility Analysis is required and none has been
prepared.
List of Subjects
15 CFR Part 738
Exports.
15 CFR Part 742
Exports and Terrorism.
Accordingly, the Export Administration Regulations (15 CFR parts
738 and 742) are amended as follows:
PART 738--COMMERCE CONTROL LIST OVERVIEW AND THE COUNTRY CHART
0
1. The authority citation for 15 CFR part 738 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. 2151 note; 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.
0
2. In Supplement no. 1 to part 738--Commerce Country Chart, the table
is amended by adding an entry under the column NP2 for China and Macau.
The revision reads as follows:
Supplement No. 1 to Part 738--Commerce Country Chart
[Reason for Control]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Chemical & biological Nuclear National Missile Regional Firearms Crime control Anti- terrorism
weapons Nonproliferation security tech stability convention --------------------------------------------
Countries ---------------------------------------------------------------------------------------------------------
CB 1 CB 2 CB 3 NP 1 NP 2 NS 1 NS 2 MT 1 RS 1 RS 2 FC 1 CC 1 CC 2 CC 3 AT 1 AT 2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
China..................................... X X X X X X X X X X ........... X ....... X ....... .......
* * * * * * *
Macau..................................... X X X X X X X X X X ........... X ....... X ....... .......
* * * * * * *
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* * * * * * *
* * * * *
PART 742--CONTROL POLICY--CCL BASED CONTROLS
0
3. The authority citation for 15 CFR 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 8, 2022, 87 FR 68015 (November 10,
2022).
0
4. Section 742.3 is amended by revising paragraph (a)(2) to read as
follows:
Sec. 742.3 Nuclear nonproliferation.
(a) * * *
(2) If NP Column 2 of the Country Chart (supplement no. 1 to part
738 of the EAR) is indicated in the applicable ECCN, a license is
required when the item is destined to a Country Group D:2 (see
supplement no. 1 to part 740 of the EAR) country, China (the People's
Republic of), or Macau.
* * * * *
Thea D. Rozman Kendler,
Assistant Secretary for Export Administration.
[FR Doc. 2023-17243 Filed 8-11-23; 8:45 am]
BILLING CODE 3510-33-P
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