This rule replaces the requirement to use the form BIS 748P in Sec. 740.18(c)(2) when submitting notice to the government in advance of shipments under License Exception ``Agricultural Commodities (AGR)'' with a requirement to submit such notices in accordance with Sec. 748.1 of the EAR.

This rule also replaces references to the BIS 748P Multipurpose Application Form with the word ``application'' in provisions that describe certain information that must be submitted with particular types of license applications. This change emphasizes that the same information is required regardless of whether an application is submitted on paper or electronically. The change described in this paragraph is made in:

This rule removes the reference to date time stamping in Sec. 754.2(g)(5)(i) by BIS of applications to export crude oil because that process occurs only with paper applications. However, the rule retains the policy in Sec. 754.2(g)(5)(i) of issuing licenses for approved applications in the order in which the applications are received.

This rule also changes the references to Sec. 748.2(c) as a source of BIS's address
[[Page 49325]]
in Sec. Sec. 748.3, 750.7(h)(3), 750.8(b) and 750.9(a) to a reference to Sec. 748.1(h)(3) because the rule removes Sec. 748.2(c) and includes the address in Sec. 748.1(h)(3).
Public Comments
Comments Related to Lack of Direct Data Interface Between SNAPR and Corporate Databases

BIS received comments on the proposed rule from eleven commenters. Eight commenters stated that SNAPR should be modified to include capability for direct data transfer from corporate databases. Five of these eight stated that SNAPR should not be made mandatory until it includes such a function. Two of the eight stated that a direct data interface was needed but did not state that they were opposed to making use of SNAPR mandatory without such an interface. One of the eight supported making use of SNAPR mandatory, but noted the need for a direct data interface. Four of the eight commenters stated that ``rather than terminate ELAIN replace it with a program interface that incorporates SNAPR data formats and document attachment

capabilities.''

The eight commenters who addressed direct data transfer offered the following points in support of the need for a direct data interface. Not all of the eight commenters offered all of these points and some of these points were offered by more than one commenter.

BIS acknowledges the convenience and potential cost savings that can be provided to the public by a direct data transmission from the applicants' computer systems to BIS. However, BIS must also consider the security requirements of its computer systems. These security needs are based on both Federal information system security requirements and a statutory provision that precludes BIS from disclosing certain information in those systems, except as provided by law. As a government agency, BIS must comply with these requirements in a manner that treats similarly situated parties in a similar manner.

The data provided to BIS through the submissions affected by this rule can include sensitive international trade information about pricing, technical design or the identity of potential customers. The systems that contain the data are high security impact systems in accordance with Federal Information Processing Standards Publication 199, Standards for Security Categorization of Federal Information Systems and the National Institute of Standards and Technology Special Publication (SP) 80060, Guide for Mapping Types of Information and Information Systems to Security Categories. These standards did not exist when ELAIN was created in the 1980s.

In addition to the need to comply with government standards for high security impact systems, BIS is obligated to implement the provisions of Section 12(c) of the Export Administration Act of 1979, as amended (EAA). Section 12(c) of the EAA prohibits the release of information that was obtained for the purpose of consideration of or that concerns license applications without a determination that the release of such information is in the national interest. To meet this obligation, BIS, among other things, makes efforts to guard against unauthorized access to its computer systems that contain information that is protected by Section 12(c) of the EAA.\1\
\1\ Although the EAA expired in August 2001, the President has ordered that ``the provisions of the [EAA] and the provisions for administration of the [EAA] shall be carried out * * * so as to continue in full force and effect * * * the export control system.'' Executive Order 13222 (Aug. 17, 2001). The Department has
determined, and federal courts have agreed, that this order has the effect of preserving the confidentiality requirements of Section 12(c). See e.g. Wisconsin Project on Nuclear Arms Control v. U.S. Dept. of Commerce, 317 F.3d 275 (DC Cir. 2003).

Meeting these obligations poses ever increasing challenges for BIS. Over the last decade, the number and sophistication of cyber attacks on government systems has increased. BIS is a confirmed target of these attacks and in order to prevent the loss or compromise of the data that it is obligated to protect, BIS has adopted stringent measures.

BIS requires extraordinary IT Security measures due to its: (1) International trade data which per FIPS199 referenced above, carries a ``high'' security impact level, and (2) confirmation by the Department of Homeland Security (DHS) U.S. Computer Emergency Response Team (USCERT) that BIS is a target of international actors engaging in broad federal level cyber espionage. The former requires data security exceeding even the requirements of personal privacy information; the latter requires security infrastructure over and above that provided by commercially available products.

The general nature of the cyberespionage threat is that BIS has been and continues to be the target of attempts by external actors to exfiltrate data. The history and pattern of these attacks support the premise that their frequency and sophistication are likely to increase. BIS bases its information technology security planning upon that premise.

The most effective BIS response to the cyberespionage threat is to implement a compartmentalized network and security infrastructure to secure mission critical export control system applications and data from foreign intrusions. Physical and logical segregation is the same concept applied to classified systems and data protection. BIS has implemented this approach for the same reasons that it is applied in classified environmentsthe cyber espionage vulnerabilities exceed the protections provided by commercial products in a noncompartmentalized environment. As confirmed with DHS and other independent federal and [[Page 49326]]
private security experts, a compartmentalized system is the only approach which will, with a high degree of certainty, yield results. Selective targeted IT security measures have not been and are not effective because of the breadth, resources, sophistication and nature of the attack methods. For example, the BIS compartmentalization includes, but is not limited to, export control system segregation from general internet access, and particular email message formats and attachments. This not only allows BIS to continue to mitigate, with 100% effectiveness, the risk of BIS systems losing sensitive data, but to ensure its systems are not used to launch an attack against the exporter community or other agencies.

Finally, this security posture must be implemented with the principle that any direct computer interface standard to be implemented for the purpose of submitting data to BIS should not arbitrarily exclude any party.

With these considerations in mind, BIS has assessed options for accomplishing the goals of the commenters without breaching its security and fairness obligations. This examination included, but was not limited to, review of procedures used by the other agencies referenced by the commenters.

For example, one method to achieve the commenters' objectives would be to allow direct data interface between private sector computer systems and the BIS licensing systems. BIS rejected this alternative. Allowing a system of unknown security standards to interface directly with a high impact security system is, in BIS's view, inconsistent with the security controls specified in National Institute of Standards and Technology publication 80053A, Guide for Assessing the Security Controls in Federal Information Systems. This position is reinforced by the information provided by Federal and private security sources, and the knowledge BIS has acquired in responding to previous attempts by outside parties to gain access to data in its information systems. BIS has determined that this method would pose an unacceptable risk of compromise and unauthorized system and data access.

BIS also considered the option of allowing data transmission from private sector computers to a logically and physically segregated BIS computer that would be isolated from BIS systems that would store sensitive data. There are options to mitigate but not to eliminate the risk posed by malicious code which may be embedded in transmissions and data content. Given sufficient time and resources, BIS could implement an isolation and containment solution that would provide an acceptable level of risk mitigation. However, the cost of the solution would increase as the number of unique user systems authorized to interface directly with BIS computer systems increased. The possibility of concealing harmful code in a data transmission and the corresponding costs and technical challenges of detecting and removing that code exist regardless of the data interface method or format; they will simply differ in nature if BIS applies an XML schema as suggested by one commenter.

Because costs and complexity would increase as the number of unique user systems increased, providing opportunity for direct data transmission to all parties who submitted comments requesting direct data transmission to BIS would not be cost effective given current information technology security requirements and capabilities. Moreover, BIS could not in fairness limit such costs and complexity by restricting direct data transmission to a few parties or to a limited number of service providers. Doing so would favor some private sector parties over others and could be viewed as fostering a government protected oligopoly.

After considering the foregoing factors, BIS concludes that eliminating the ELAIN system and requiring use of the SNAPR Web based data entry system is the best available alternative given current information technology capabilities and fiscal constraints. Accordingly, BIS intends to discontinue use of ELAIN and require the use of the SNAPR system unless one of the reasons for authorizing paper submissions set forth in this rule applies in particular case. Comment Related to Cost Reduction Afforded by SNAPR

One commenter noted that use of SNAPR would likely reduce costs and processing time compared to paper forms.

BIS agrees. One of the main advantages of an electronic system such as SNAPR is reduced costs and processing time.
Comments Proposing Changes to SNAPR That Are Not Related to the Proposed Rule

BIS received several comments proposing changes to SNAPR that do not address the issues in the proposed rule. BIS will consider these comments as it further develops the SNAPR system and may implement them as resources become available. These comments are:

These comments embody proposals to make SNAPR more useful or effective. BIS believes that they need not be addressed in connection with this rule. BIS will consider these comments in connection with its future efforts to improve SNAPR.
Comments Proposing Changes That Cannot Be Implemented at This Time Because of Legacy System Limitations

Two comments proposed changes to SNAPR that cannot be implemented at this time because of limitations of the legacy Export Control Automated Support System (ECASS). ECASS, which has been operational since the early 1980s, is the computer system that BIS uses for internal processing of license applications, classification requests, encryption review requests and License Exception AGR notifications. BIS will consider these comments in connection with its multiyear incremental ECASS redesign and deployment of the ECASS Redesign [[Page 49327]]
(ECASSR) system. However, the expectation is that the changes proposed in these two comments, if adopted, will not be implemented until the final stage of the ECASSR system deployment when the legacy ECASS system is retired. This is because the legacy ECASS system architecture is an outdated ``monolithic'' design; although the new ECASSR system is being implemented in modules incrementally, the legacy system must be retired in its entirety to implement broad data element changes cost effectively.

These two comments are:

One commenter stated that BIS should change the computer/ microprocessor performance field to accommodate APP (adjusted peak performance) rather than MTOPS (millions of theoretical operations per second).

In April 2006, the EAR were amended to replace the computer performance metric composite theoretical performance (CTP) measured in millions of theoretical operations per second (MTOPS) with a new metric called adjusted peak performance (APP) measured in weighted teraFLOPS (WT). In November 2007, another EAR amendment replaced CTP with APP for microprocessor performance measurement. In the preamble to the April 2004 rule, BIS noted that a computer with a CTP of 190,000 MTOPS would have an APP of approximately 0.75 WT. A change of this magnitude requires an adjustment to the range of values that may be entered into the relevant field in SNAPR. Currently SNAPR will accept a range of values ranging from 0.0000001 to 9.9999999 WT. After considering applications and licenses currently in its database and estimating the rate of future increases in computer performance, BIS believes that SNAPR as currently configured is adequate for data input of currently available computers and microprocessors. However, BIS estimates that computers with a performance level of 10 WT or greater are likely to be available sometime in the year 2009 or 2010. Therefore, BIS will begin the change control review process to modify SNAPR to accept values exceeding 10 WT in the APP field.
Comments Concerning Electronically ``Attaching'' Files to SNAPR Submissions

BIS received comments concerning the requirements for electronically ``attaching'' documents to the SNAPR submissions. These comments are:

BIS contacted the commenter who provided this comment for clarification and queried its licensing officers to identify instances of the problems alluded to in these comments. With the information obtained from those sources, BIS concluded that these comments are intended to address the following three issues:

BIS believes that no changes to the rule or to SNAPR are needed because of the issues raised in these comments. BIS selected PDF as the file format for attachments in SNAPR because it is widely available, low cost and BIS can effectively implement security measures that provide a high level of protection against the Adobe related attack vectors. BIS notes that PDF files are widely used for transmission of technical documents. Although some documents are too large to scan in desktop scanners, commercial services that can scan such documents exist. SNAPR will accept attachment files up to 10 Mb in size. BIS has reviewed the SNAPR submissions that it has received and determined that the typical file size is approximately 5 Mb. SNAPR does not place a limit on the number of files that may be attached to a submission. In some cases, the submitter may be able to split the file into more than one file to get below the file size limitations. Finally, BIS notes that one of the criteria under which BIS will authorize paper submissions is ``BIS has determined that urgency, a need to implement U.S. government policy or a circumstance outside the submitting party's control justify allowing paper submissions in a particular instance.'' BIS believes that this criterion provides it with adequate discretion to authorize paper submissions in instances where circumstances truly make attaching PDF files impracticable.

Comment Related to SNAPR Registration Procedures

One commenter stated a twoweek period to issue a Personal Identification Number is not suitable if SNAP (SNAPR) is mandatory.

BIS agrees that, in nearly all cases, two weeks should not be needed to issue a PIN. BIS believes that most PINs are issued substantially less than two weeks time. BIS encourages persons who believe that the issuance of a PIN is taking inordinately long to contact the Export Management and Compliance Division at 202 482 2148 or 202 482 0062.

Changes in This Final Rule Compared to the Proposed Rule

After review of the comments, BIS is making no changes to the substantive points of the proposed rule in response to the comments. BIS is making only the following technical and conforming changes compared to the proposed rule.

The proposed rule did not state whether the applications for a Special Iraq Reconstruction License (SIRL) would be required to be filed via SNAPR. SIRL applications are similar to Special
Comprehensive License (SCL) applications. This final rule explicitly states the SNAPR filing is not required for SIRLS, thereby giving the two similar applications the same treatment.

In Sec. 740.17, footnote number 4 is revised to refer to Sec. Sec. 748.1, 748.4 and 748.6, the sections that govern license application submission under this rule.

In Sec. 742.2(e)(1), the reference to the BIS form 748P is changed to a reference to an application.

In Sec. 750.7(h)(3), 750.8(b), and 750.9(a) the reference to Sec. 748(c) is replaced with Sec. 748.1(d)(2) because this rule removes Sec. 748.2(c) and includes the relevant information in Sec. 748.1(d)(2).

Rulemaking Requirements

1. This rule has been determined to be significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor 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
[[Page 49328]]
(OMB) Control Number. This regulation involves collections previously approved by the OMB under control number 06940088, ``Simplified Network Application Processing System'' which carries a burden hour estimate of 58 minutes to prepare and submit form BIS748.
Miscellaneous and recordkeeping activities account for 12 minutes per submission. This proposed rule would require persons seeking authorization to submit paper filings to state, either in the additional information block on the paper form or an attachment, which of the criteria for paper submissions they meet and the reasons therefore. BIS believes that requests seeking authorization to submit paper filings would impose a minimal burden on applicants as the information requirements are small and the number of requests is expected to be low. Applicants making a request would identify one or more of the 5 criteria under which BIS would authorize a paper submission, and provide the factual basis for the authorization to submit on paper. BIS estimates that only a small number of submissions will seek authorization to file on paper. In 2008, more than 96% of all submissions affected by this rule were submitted to BIS via SNAPR. Therefore, BIS estimates that this requirement will make no material change of the estimated time of 58 minutes needed to prepare and submit a BIS748. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to David Rostker, OMB Desk Officer, by email at david_rostker@omb.eop.gov or by fax to (202) 3957285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, Room H 2705, 14th Street and Pennsylvania Ave., NW., Washington, DC 20230.

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

4. The Chief Counsel for Regulation at the Department of Commerce certified to the Chief Counsel for Advocacy at the Small Business Administration that this rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The factual basis was published in the proposed rule and is not repeated here. BIS received no comments that addressed the economic impact of this rule on small entities, therefore a final regulatory flexibility analysis was not prepared.
List of Subjects

15 CFR Parts 740, 750 and 748

Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.
15 CFR Part 742

Exports, Terrorism.

15 CFR Part 744

Exports, Reporting and recordkeeping requirements, Terrorism. 15 CFR Part 754

Agricultural commodities, Exports, Forests and forest products, Horses, Petroleum, Reporting and recordkeeping requirements. 15 CFR Part 764

Administrative practice and procedure, Exports, Law enforcement, Penalties.
15 CFR Part 772

Exports.
Accordingly, parts 740, 742, 744, 748, 750, 754, 764 and 772 of the Export Administration Regulations (15 CFR 730774) are amended as follows:
PART 740[AMENDED]
1. The authority citation for 15 CFR part 740 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; Sec. 901911, Public Law 106387; 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 3, 2006, 71 FR 44551 (August 7, 2006); Notice of July 23, 2008, 73 FR 43603 (July 25, 2008).
2. In Sec. 740.8 revise paragraph (b)(2) to read as follows: Sec. 740.8 Key management infrastructure (KMI).
* * * * *
(b) * * *
* * * * *
(2) For such classification requests, indicate ``License Exception KMI'' in Block 9 on the application. Submit the request to BIS in accordance with Sec. Sec. 748.1 and 748.3 of the EAR and send a copy of the request to: Attn: ENC Encryption Request Coordinator, 9800 Savage Road, Suite 6940, Fort Meade, MD 207556000.
* * * * *
3. In Sec. 740.9 revise the first sentences of paragraphs (a)(4)(i) and (a)(4)(iii) to read as follows:
Sec. 740.9 Temporary imports, exports and reexports (TMP). * * * * *
(a) * * *
(4) * * *
(i) * * * If the exporter or the reexporter wishes to sell or otherwise dispose of the items abroad, except as permitted by this or other applicable provision of the EAR, the exporter or reexporter must request authorization by submitting a license application to BIS in accordance with Sec. Sec. 748.1, 748.4 and 748.6 of the EAR. * * * * *
(iii) * * * If the exporter wishes to retain an item abroad beyond the 12 months authorized by paragraph (a) of this section, the exporter must request authorization by submitting a license application in accordance with Sec. Sec. 748.1, 748.4 and 748.6 of the EAR to BIS 90 days prior to the expiration of the 12 month period.
* * * * *
4. In Sec. 740.12, revise paragraph (a)(2)(iii)(C) to read as follows: Sec. 740.12 Gift parcels and humanitarian donations (GFT). (a) * * *
(2) * * *
(iii) * * *
(C) Parties seeking authorization to exceed these frequency limits due to compelling humanitarian concerns (e.g., for certain gifts of medicine) should submit a license application in accordance with Sec. Sec. 748.1, 748.4 and 748.6 of the EAR to BIS with complete justification.
* * * * *
5. In Sec. 740.15, revise footnote 4 to paragraph (c), introductory text to read as follows:
Sec. 740.15 Aircraft and vessels (AVS).
* * * * *
\4\ Where a license is required, see Sec. Sec. 748.1, 748.4 and 748.6 of the EAR.
* * * * *
6. In Sec. 740.17 revise paragraph (d)(1) to read as follows: Sec. 740.17 Encryption commodities and software (ENC).
* * * * *
(d) * * *
* * * * *
(1) Instructions for requesting review. Review requests submitted to BIS must be submitted as described in Sec. Sec. 748.1 and 748.3 of the EAR. See paragraph (e)(5)(ii) of this section for the mailing address for the ENC Encryption Request Coordinator. To ensure that your review request is properly routed, insert the phrase ``License Exception ENC'' in Block 9 (Special Purpose) of the application. Also, place an ``X'' in the box marked ``Classification Request'' in Block 5 (Type of Application) of Form
[[Page 49329]]
BIS748P or select ``Commodity Classification'' if filing
electronically. Neither the electronic nor paper forms provide a separate block to check for the submission of encryption review requests. Failure to properly complete these items may delay consideration of your review request.
* * * * *
7. In Sec. 740.18 revise paragraph (c)(2) to read as follows: Sec. 740.18 Agricultural commodities (AGR).
* * * * *
(c) * * *
* * * * *
(2) Procedures. You must provide prior notification of exports and reexports under License Exception AGR by submitting a completed application in accordance with Sec. 748.1 of the EAR. The following blocks must be completed, as appropriate: Blocks 1, 2, 3, 4, 5 (by marking box 5 ``Other''), 14, 16, 17, 18, 19, 21, 22 (a), (e), (f), (g), (h), (i), (j), 23, and 25 according to the instructions described in Supplement No. 1 to part 748 of the EAR. If your commodity is fertilizer, western red cedar or live horses, you must confirm that BIS has previously classified your commodity as EAR99 by placing the Commodity Classification Automatic Tracking System (CCATS) number in Block 22(d). BIS will not initiate the registration of an AGR notification unless the application is complete.
* * * * *
PART 742[AMENDED]
8. The authority citation for 15 CFR part 742 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 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, Public Law 10811, 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 200323 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of July 23, 2008, 73 FR 43603 (July 25, 2008); Notice of November 8, 2007, 72 FR 63963 (November 13, 2007).
9. Revise the first sentence of Sec. 742.2(e)(1) to read as follows: Sec. 742.2 Proliferation of chemical and biological weapons. * * * * *
(e) * * *
(1) Supplement No. 1 to part 748 of the EAR provides general instructions for completing license applications
* * * * *
* * * * *
10. In Sec. 742.15, revise paragraph (b)(2)(i) to read as follows: Sec. 742.15 Encryption items.
* * * * *
(b) * * *
* * * * *
(2) * * *
* * * * *
(i) Procedures for requesting review. To request review of your mass market encryption products, you must submit to BIS and the ENC Encryption Request Coordinator the information described in paragraphs (a) through (e) of Supplement No. 6 to this part 742, and you must include specific information describing how your products qualify for mass market treatment under the criteria in the Cryptography Note (Note 3) of Category 5, Part 2 (``Information Security''), of the Commerce Control List (Supplement No. 1 to part 774 of the EAR). Submit review requests to BIS in accordance with Sec. Sec. 748.1 and 748.3 of the EAR. To ensure that your review request is properly routed, insert the phrase ``Mass market encryption'' in Block 9 (Special Purpose) and place an ``X'' in the box marked ``Classification Request'' in Block 5 (Type of Application) Block 5 does not provide a separate item to check for the submission of encryption review requests. Failure to properly complete these items may delay consideration of your review request. Submissions to the ENC Encryption Request Coordinator should be directed to the mailing address indicated in Sec. 740.17(e)(5)(ii) of the EAR. BIS will notify you if there are any questions concerning your request for review (e.g., because of missing or incomplete support documentation).
* * * * *
11. In Supplement No. 6 to part 742 revise the first sentence to read as follows:
Supplement No. 6 to Part 742 Guidelines for Submitting Review Requests for Encryption Items

Review requests for encryption items must include all of the documentation described in this supplement and be submitted to BIS in accordance with Sec. Sec. 748.1 and 748.3 of the EAR.
* * * * *
PART 744[AMENDED]
The authority citation for part 744 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 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; 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. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; Notice of July 23, 2008, 73 FR 43603 (July 25, 2008); Notice of November 8, 2007, 72 FR 63963 (November 13, 2007).
12. Revise Sec. 744.21(d) to read as follows:
Sec. 744.21 Restrictions on certain military enduses in the People's Republic of China.
* * * * *
(d) License application procedure. When submitting a license application pursuant to this section, you must state in the ``additional information'' block of the application that ``this application is submitted because of the license requirement in Sec. 744.21 of the EAR (Restrictions on Certain Military Enduses in the People's Republic of China).'' In addition, either in the additional information block or in an attachment to the application, you must include all known information concerning the military enduse of the item(s). If you submit an attachment with your license application, you must reference the attachment in the ``additional information'' block of the application.
* * * * *
PART 748[AMENDED]
13. The authority citation for 15 CFR part 748 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 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 July 23, 2008, 73 FR 43603 (July 25, 2008).
14. In Sec. 748.1, revise paragraph (a) and add a paragraph (d) to read as follows:
Sec. 748.1 General provisions.
(a) Scope. In this part, references to the Export Administration Regulations or EAR are references to 15 CFR chapter VII, subchapter C. The provisions of this part involve requests for classifications and advisory opinions, export license applications, encryption review requests, reexport license applications, and certain license exception notices subject to the EAR. All terms,
[[Page 49330]]
conditions, provisions, and instructions, including the applicant and consignee certifications, contained in electronic or paper form(s) are incorporated as part of the EAR. For the purposes of this part, the term ``application'' refers to both electronic applications and the Form BIS748P: Multipurpose Application.
* * * * *
(d) Electronic Filing Required. All export and reexport license applications (other than Special Comprehensive License or Special Iraq Reconstruction License applications), encryption review requests, license exception AGR notifications, and classification requests and their accompanying documents must be filed via BIS's Simplified Network Application Processing system (SNAPR), unless BIS authorizes submission via the paper forms BIS 748P (Multipurpose Application Form), BIS748PA (Item Appendix) and BIS748PB, (EndUser Appendix). Only original paper forms may be used. Facsimiles or reproductions are not acceptable.
(1) Reasons for authorizing paper submissions. BIS will process paper applications notices or requests if the submitting party meets one or more of the following criteria:
(i) BIS has received no more than one submission (i.e. the total number of export license applications, reexport license applications, encryption review requests, license exception AGR notifications, and classification requests) from that party in the twelve months immediately preceding its receipt of the current submission; (ii) The party does not have access to the Internet;
(iii) BIS has rejected the party's electronic filing registration or revoked its eligibility to file electronically;
(iv) BIS has requested that the party submit a paper copy for a particular transaction; or
(v) BIS has determined that urgency, a need to implement U.S. government policy or a circumstance outside the submitting party's control justify allowing paper submissions in a particular instance. (2) Procedure for requesting authorization to file paper applications, notifications, or requests. The applicant must state in Block 24 or as an attachment to the paper application (Form BIS 748P) which of the criteria in paragraph (d)(1) of this section it meets and the facts that support such statement. Submit the completed application, notification or request to Bureau of Industry and Security, U.S. Department of Commerce, 14th Street and Pennsylvania, NW., Room H2705, Washington DC 20230.
(3) BIS decision. If BIS authorizes or requires paper filing pursuant to this section, it will process the application, notification or request in accordance with Part 750 of the EAR. If BIS rejects a request to file using paper, it will return the Form BIS748P and all attachments to the submitting party without action and will state the reason for its decision.
Sec. 748.2 [Amended]
15. In Sec. 748.2, remove paragraph (c).
16. In Sec. 748.3 revise; paragraph (b) introductory text, the final sentence of paragraph (b)(1), paragraph (b)(2) and first sentence of paragraph (c) to read as follows:
Sec. 748.3 Classification requests, advisory opinions, and encryption review requests.
* * * * *
(b) * * * Submit classification requests in accordance with the procedures in Sec. 748.1.
(1) * * * Classification requests must be supported by any descriptive literature, brochures, precise technical specifications or papers that describe the items in sufficient technical detail to enable classification by BIS submitted as PDF files attached to the SNAPR submission unless a paper submission is authorized pursuant to Sec. 748.1 of the EAR.
(2) When submitting a classification request, you must complete Blocks 1 through 5, 14, 22(a), (b), (c), (d), and (i), 24, and 25 on the application. You must provide a recommended classification in Block 22(a) and explain the basis for your recommendation based on the technical parameters specified in the appropriate ECCN in Block 24. If you are unable to determine a recommended classification for your item, include an explanation in Block 24, identifying the ambiguities or deficiencies that precluded you from making a recommended
classification.
(c) * * * Advisory opinion requests must be in writing and be submitted to the address listed in Sec. 748.1(d)(2). * * * * * * * *
17. In Sec. 748.4, revise the third sentence of paragraph (b)(1) and the first sentence of paragraph (b)(2)(ii) to read as follows. Sec. 748.4 Basic guidance related to applying for a license. * * * * *
(b) * * * (1) * * * If there is any doubt about which persons should be named as parties to the transaction, the applicant should disclose the names of all such persons and the functions to be performed by each in Block 24 of the application. * * *
(2) * * *
(ii) * * * Block 7 of the application (documents on file with applicant) must be marked ``other'' and Block 24 (Additional information) must be marked ``748.4(b)(2)'' to indicate that the power of attorney or other written authorization is on file with the agent. * * * * *
18. In Sec. 748.5, revise the first sentence of the introductory paragraph and the second sentence of paragraph (b) to read as follows: Sec. 748.5 Parties to the transaction.

The following parties may be entered on the application. * * * (a) * * *
(b) * * * If a person and address is listed in Block 15 of the application, the Bureau of Industry and Security will send the license to that person instead of the applicant.
* * * * *
19. In Sec. 748.6, revise paragraph (a), the first sentence of paragraph (b) and paragraph (e) to read as follows:
Sec. 748.6 General instructions for license applications. (a) Instructions. General instructions for filling out license applications are in Supp. No. 1 to this part. Special instructions for applications involving certain transactions are listed in Sec. 748.8 and described fully in Supp. No. 2 to this part.
(b) * * * Each application has an application control number. * * * * * * * *
(e) Attachments to applications. Documents required to be submitted with applications filed via SNAPR must be submitted as PDF files using the procedures described in SNAPR. Documents required to be submitted with paper applications must bear the application control number to which they relate and, if applicable, be stapled to the paper form. Where necessary, BIS may require you to submit additional information beyond that stated in the EAR confirming or amplifying information contained in your license application.
* * * * *
PART 750[AMENDED]
20. The authority citation for part 750 is revised to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; Sec. 1503, Public Law 10811, 117 Stat. 559; 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 200323 of May 7, 2003, 68 FR 26459, May 16, 2003;
[[Page 49331]]
Notice of July 23, 2008, 73 FR 43603 (July 25, 2008).
21. Revise the last sentence of Sec. 750.7(h)(3) to read as follows: Sec. 750.7 Issuance of licenses.
* * * * *
(h) * * *
(3) * * * The written request must be submitted to BIS at the address listed in Sec. 748.1(d)(2) of the EAR.
* * * * *
22. Revise the second sentence of Sec. 750.8(b) to read as follows: Sec. 750.8 Revocation or suspension of licenses.
* * * * *
(b) * * * The license must be returned to BIS at the address listed in Sec. 748.1(d)(2) of the EAR, Attn: ``Return of Revoked/Suspended License''.
* * * * *
23. Revise the first sentence of Sec. 750.9(a) to read as follows: Sec. 750.9 Duplicate licenses.
(a) * * * If a license is lost, stolen or destroyed, you, as the licensee, may obtain a duplicate of the license by submitting a letter to the BIS at the address listed in Sec. 748.1(d)(2) of the EAR, Attention: ``Duplicate License Request''.
* * * * *
PART 754[AMENDED]
24. The authority citation for 15 CFR part 754 is revised to read as follows:

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); 30 U.S.C. 185(s), 185(u); 42 U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app. 466c; E.O. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 3, 2006, 71 FR 44551 (August 7, 2006); Notice of July 23, 2008, 73 FR 43603 (July 25, 2008). 25. In Sec. 754.2, revise paragraphs (g)(1) and (g)(5)(i) to read as follows:
Sec. 754.2 Crude oil.
* * * * *
(g) * * *
* * * * *
(1) Applicants must submit their applications in accordance with Sec. Sec. 748.1, 748.4 and 748.6 of the EAR.
* * * * *
(5) * * *
(i) BIS will issue licenses for approved applications in the order in which the applications are received, with the total quantity authorized for any one license not to exceed 25 percent of the annual authorized volume of California heavy crude oil.
* * * * *
26. In Sec. 754.4, revise paragraphs (d)(1), (d)(2), and the introductory text of paragraph (d)(3) to read as follows:
Sec. 754.4 Unprocessed Western Red Cedar.
* * * * *
(d) * * *
(1) Applicants requesting to export unprocessed western red cedar must apply for a license in accordance with Sec. 748.1, 748.4 and 748.6 of the EAR, submit any other documents as may be required by BIS, and submit a statement from an authorized representative of the exporter, reading as follows:

I, (Name) (Title) of (Exporter) HEREBY CERTIFY that to the best of my knowledge and belief the (Quantity) (cubic meters or board feed scribner) of unprocessed western red cedar timber that (Exporter) proposes to export was not harvested from State or Federal lands under contracts entered into after October 1, 1979.
Signature
Date
(2) In Blocks 16 and 18 of the application, ``Various'' may be entered when there is more than one purchaser or ultimate consignee. (3) For each application submitted, and for each export shipment made under a license, the exporter must assemble and retain for the period described in part 762 of the EAR, and produce or make available for inspection, the following:
* * * * *
27. In Sec. 754.5 revise the second sentence of paragraph (b)(2) to read as follows:
Sec. 754.5 Horses for export by sea.
* * * * *
(b) * * *
(2) * * * You must provide a statement in the additional information section of the application certifying that no horse under consignment is being exported for the purpose of slaughter. * * * * *
28. In Supplement No. 2 to Part 754, revise footnote number 2 to read as follows:
Supplement No. 2 to Part 754Western Red Cedar
\2\ Report commodities on license applications in the units of quantity indicated.
* * * * *
PART 764[AMENDED]
29. The authority citation for 15 CFR part 764 is revised to read as follows:

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 3, 2006, 71 FR 44551 (August 7, 2006); Notice of July 23, 2008, 73 FR 43603 (July 25, 2008).
30. In Sec. 764.7, revise the second sentence of paragraph (b)(2)(i) to read as follows:
Sec. 764.7 Activities involving items that may have been illegally exported or reexported to Libya.
* * * * *
(b) * * *
(2) * * *
(i) * * * License applications should be submitted in accordance with Sec. Sec. 748.1, 748.4 and 748.6 of the EAR, and should fully describe the relevant activity within the scope of Sec. 764.2(e) of this part which is the basis of the application.
* * * * *
PART 772[AMENDED]
31. The authority citation for 15 CFR part 772 is revised to read as follows:

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 3, 2006, 71 FR 44551 (August 7, 2006); Notice of July 23, 2008, 73 FR 43603 (July 25, 2008).
32. In Sec. 772.1 revise the second sentence of the definition of the term ``Other party authorized to receive license.''
Sec. 772.1 Definitions of terms as used in the Export Administration Regulations (EAR).

* * * * *

Other party authorized to receive license. * * * If a person and address is listed in Block 15 of the application, the Bureau of Industry and Security will send the license to that person instead of the applicant.
* * * * *

Dated: August 7, 2008.
Christopher R. Wall,
Assistant Secretary for Export Administration.
[FR Doc. E818852 Filed 82008; 8:45 am]
BILLING CODE 351033P

FOR FURTHER INFORMATION CONTACT For information about this rule contact William Arvin, email warvin@bis.doc.gov or tel. 2024822440. For information about registering for or using the SNAPR system contact Lisa Williams at 2024822148.