BIS Seeks Comments on Possible Removal of 7A Navigation/Avionics Commodities from De Minimis Eligibility
The Bureau of Industry and Security has issued a notice of inquiry seeking public comment on the prospect of removing from de minimis eligibility1 commodities controlled for missile technology (MT) reasons under Category 7-Product Group A on the Commerce Control List (CCL), except when these 7A commodities are incorporated as standard equipment in Federal Aviation Administration (FAA) (or national equivalent) certified civilian transport aircraft.
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(7A commodities are certain equipment and components related to navigation and avionics.)
Comments must be received by January 20, 2009.
7A Commodities Might Provide Foreign Products With Military Capabilities Even Below De Minimis Levels
Reviewing agencies have raised concerns that such commodities, when controlled for MT reasons, have the potential to provide a foreign product with unique military capabilities, even if the value of the commodity is below normal de minimis levels.
BIS explains that while airline and national aviation safety controls help to minimize the risk of diversion for 7A commodities installed in civilian aircraft, and it is expected the commodities will remain in the aircraft and free from tampering with such safety controls, when the commodities are exported in less costly end items with no national aviation safety authority controls, there may be a higher risk of diversion.
If De Minimis Eligibility Removed, Certain Foreign-Made Items with U.S.-7A Commodities Would be Subject to EAR
If such a policy were implemented, foreign made items that incorporate U.S.-origin 7A commodities that are controlled for MT purposes would be subject to the Export Administration Regulations (i.e., a license may be required from BIS for the export abroad to another foreign country or in-country transfer of the foreign-made item.)
However, BIS would maintain de minimis eligibility for 7A commodities controlled for MT purposes when they are incorporated as standard equipment in FAA (or national equivalent) certified civilian transport aircraft.
BIS Seeking Information on Impact of This Change to Domestic/Foreign Industry
BIS is seeking public input on the impact such a change would have on U.S. manufacturers of category 7A commodities, as well as the impact such a change would have on foreign manufacturers that incorporate U.S.-origin 7A commodities into their foreign-made products, such as:
estimates related to number of exports, revenue, jobs, etc. that would be affected;
the impact on decisions to incorporate U.S.-origin items in future foreign products;
examples of commercial foreign products that incorporate 7A commodities; and
concrete information (URL addresses, technical specifications, etc.) about the availability of equivalent commodities from foreign sources.
1A March 1987 rule established thresholds at which the amount of U.S.-origin commodities in foreign-made items would warrant exercise of U.S. jurisdiction over the foreign-made item when located outside the U.S. A major revision of the EAR in 1996 introduced the term ''de minimis'' and established de minimis thresholds for software and technology. The most recent revisions to the de minimis rules occurred in October 2008, when BIS published a rule to change the de minimis calculation for foreign produced hardware bundled with U.S.-origin software, to clarify the definition of 'incorporate' as it is applied to the de minimis rules, etc. (See ITT's Online Archives or 10/02/08 news, 08100220, for BP summary of the October 2008 rule.)
BIS contact - Sharron Cook (202) 482-2440
BIS notice (D/N 0810231385-81390-01, FR Pub 11/20/08) available at http://edocket.access.gpo.gov/2008/pdf/E8-27588.pdf