BIS Raises Digital Computer APP, Albania & Croatia Now Tier 1 for HPCs
The Bureau of Industry and Security has issued a final rule, effective June 24, 2011, which raises the Adjusted Peak Performance (APP) for digital computers under Export Control Classification Number 4A003, and moves Albania and Croatia from Computer Tier 3 to Computer Tier 11 with regard to export control requirements for high performance computers (HPCs).
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(BIS' APP amendments implement changes made to the Wassenaar Arrangement's List of Dual Use Goods and Technologies maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies at the December 2009 WA Plenary Meeting.)
ECCN 4A003 APP Controls Raised to 1.5 WT
Because of the advancement of high performance computer technology and the agreed Wassenaar changes, BIS' final rule revises ECCN 4A003 on the Commerce Control List (Supplement No. 1 to 15 CFR Part 774) by:
- Revising the APP from 0.75 to 1.5 Weighted TeraFLOPS (WT) in 4A003.b to maintain control of leading edge computers, while decontrolling older computers.
- Revising the APP from 0.75 to 1.5 WT in the AT control paragraph of the License Requirements section to make it consistent with the revision in 4A003.b.
- Revising the APP from 0.75 to 1.5 WT (in two places) in Note 1 of the License Requirements section, to make it consistent with the revision in 4A003.b.
Corresponding Revisions to License Exception APP, De Minimis Rule, Etc.
Pursuant to the APP changes to ECCN 4A003, BIS' final also makes corresponding revisions to License Exception APP, the de minimis rule, and post shipment verification reporting requirements in the Export Administration Regulations, as follows:
License Exception APP. In License Exception APP, with regard to deemed exports of “development” and “production” technology controlled by ECCN 4E001 and source code controlled by ECCN 4D001, BIS is also raising the eligibility parameter (APP) from 0.5 WT to 1.5 WT for foreign nationals of Computer Tier 1 countries (with the exception of the countries listed in Section 740.7(c)(3)(i) that have unlimited APP for “development” and “production” technology and source code) and from 0.1 WT to 0.5 WT for foreign nationals of Computer Tier 3 countries, because of the advancement of high performance computer technology.
De minimis rule. BIS' rule increases the APP parameter from 0.75 WT to 1.5 WT under the "De minimis U.S. Content" rule in 15 CFR 734.4 in harmonization with the revision made to ECCN 4A003. Foreign-made computers with an APP of 1.5 WT (amended from 0.75 WT) located in a foreign country are not eligible for the application of the de minimis rules when they contain U.S.-origin controlled semiconductors (other than memory circuits) classified under ECCN 3A001 and are destined to a country in Computer Tier 3 of 15 CFR 740.7 of the EAR.
Tier 3 post shipment verification. BIS' rule increases the APP level from 0.75 WT to 1.5 WT for special post-shipment reporting requirements for the export of certain computers to destinations in Computer Tier 3 of License Exception APP (15 CFR 740.7). The reporting requirement applies to high performance computer exports to destinations in Computer Tier 3, as well as exports of commodities used to enhance computers previously exported or reexported to Computer Tier 3 destinations, where the APP is greater than 1.5 WT (amended from 0.75 WT).
Albania & Croatia Now Eligible for License Exception APP, Etc.
BIS' final rule removes Albania and Croatia from Computer Tier 3 in 15 CFR 740.7(d)(1) and places these countries in Computer Tier 1 in 15 CFR 740.7(c)(1), as the Administration believes they are eligible to be treated as Computer Tier 1 countries2.
This revision will result in fewer license applications, because Albania and Croatia will now be eligible for License Exception APP. In addition, the EAR will no longer require National Defense Authorization Act (NDAA)-based recordkeeping and post shipment verification reporting of exports of high performance computers to Albania and Croatia.
1Countries listed in Tier 1 are ally countries or countries that do not pose a national security, nuclear or missile threat to the U.S. Tier 3 Countries are all other countries with the exception of the terrorist supporting countries listed in Country Group E:1 of Supplement No. 1 to 15 CFR Part 740.
2The Administration believes Albania and Croatia are eligible to be treated as Computer Tier 1 countries because their governments have made the necessary reforms to allow the countries to join the North Atlantic Treaty Organization, and have adopted accepted global standards in export controls.
(See ITT's Online Archives or 09/08/10, 09/09/10, and 09/10/10 news, 10090819, 10090920, and 10091013, for multi-part BP summary of BIS' September 2010 final rule implementing most changes agreed to at the December 2009 Plenary, including adjustments to the APP for ECCNs 4D001 and 4E001.)
BIS contact - Sharron Cook (202) 482-2440
(D/N 110210131-1317-01, FR Pub 06/24/11)