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Adoption of Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR) rule (2022)

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The Adoption of Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR) rule is a significant rule issued by the Bureau of Industry and Security (BIS), U.S. Department of Commerce effective July 18, 2022, that amended the Export Administration Regulations (EAR) to add a section requiring congressional notification of certain semiautomatic weapon license applications, depending on value and destination of weapons. This rule is pursuant to the Export Control Reform Act of 2018 (ECRA).[1]

HIGHLIGHTS
  • Name: Adoption of Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR)
  • Code of Federal Regulations: 15 CFR 740, 743, and 748
  • Agency: Bureau of Industry and Security (BIS), U.S. Department of Commerce
  • Action: Final rule
  • Type of significant rule: Other significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    This rule follows the change of regulation jurisdictions of the 0A501.a semiautomatic firearm (previously existing under the International Traffic in Arms Regulations (ITAR)), and the unique use of the weapon in the military and law enforcement, as well as recreationally. Under a 2020 final rule, the 0A501.a firearm no longer required congressional notification of purchases amounting to $1 million or more, and the firearm came under BIS's jurisdiction. This rule implemented different standards of congressional notification per t§ 743.6 of the EAR. This rule was exempt from notice and comment under the Administrative Procedure Act's exemptions because it involves military and foreign affairs of the United States.[1]

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:

    “ In this final rule, the Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to add new § 743.6, Prior notifications to Congress of exports of semiautomatic firearms, to adopt a congressional notification requirement for certain license applications having semiautomatic firearms that are (i) classified under Export Control Classification Number (ECCN) 0A501.a and (ii) valued at $4 million or more. The congressional notification requirement will not apply if the total value of the application is valued at $4 million or more but contains 0A501.a semiautomatic firearms valued at less than $4 million. Further, the congressional notification requirement will not apply to license applications if the 0A501.a semiautomatic firearms are destined for countries in Country Group A:5 or A:6 (see supplement no.1 to part 740 of the EAR), with the exception of Mexico, South Africa, and Turkey. The congressional notification requirement will also not apply to exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR) or when for the official use by an agency of the North Atlantic Treaty Organization (NATO).[1][2] ”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “

    This rule adds § 743.6 Prior notifications to Congress of exports of certain firearms. This new section is modeled on the same type of congressional notification process as followed under § 743.5 for “600 Major Defense Equipment.” New § 743.6 consists of four paragraphs.

    Paragraph (a) (General Requirement) specifies that any license application for the export of semiautomatic firearms controlled under ECCN 0A501.a (which includes semiautomatic rifles and semiautomatic pistols) will be notified to Congress as provided in § 743.6. Paragraph (a) includes two exclusions under paragraphs (a)(1) to (2) from the congressional notification requirement. Paragraph (a)(1) excludes exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR). Paragraph (a)(2) excludes applications for official use by an agency of NATO.

    New paragraph (b) specifies the country scope for these congressional notifications. Paragraph (b) specifies that BIS will notify Congress prior to issuing a license authorizing the export of items to a country outside the countries listed in Country Group A:5 or A:6, with the exception of Mexico, South Africa, or Turkey. Paragraph (b) specifies that the congressional requirement will apply when the commodities are sold under a contract or are otherwise part of an export transaction that includes $4 million or more of semiautomatic firearms controlled by ECCN 0A501.a. For these reasons, BIS does not anticipate any change in the number of license applications received by BIS because license applicants are required to follow the same process they were previously in determining how to structure a license application for these semiautomatic firearms controlled under ECCN 0A501.a.

    Paragraph (c) provides guidance on additional information that license applicants will need to provide as part of the license application process. Importantly, this rule does not require a purchase order to apply for a license. However, if the license application includes 0A501.a semiautomatic firearms subject to a signed contract (which may be a purchase order), paragraph (c) specifies the signed contract would need to be included as a support document for the license application. Paragraph (c) further specifies that a written explanation from the applicant will be required when the export does not include a contract and whether the application is supported by a signed contract or a written explanation by the applicant, an applicant will need to include a statement of the value of the semiautomatic firearms controlled by ECCN 0A501.a to be exported for any proposed export described in paragraph (b) of § 743.6.

    This final rule also adds two anti-circumvention sentences to the end of paragraph (c) to make license applicants aware that they are prohibited from splitting license applications in order to try to circumvent the congressional notification process. This rule specifies that any activity intended to circumvent notification requirements is prohibited. The last sentence this rule adds to paragraph (c) provides illustrative examples of such prohibited activities, such as the splitting or structuring of contracts to avoid exceeding applicable notification dollar value limits.

    The dollar value threshold of $4 million or more will only be based on the portion of the license application for semiautomatic firearms controlled by ECCN 0A501.a. Paragraph (c) specifies that license applications for semiautomatic firearms controlled by ECCN 0A501.a may include other nonautomatic firearms, shotguns, other 0x5zz items, or other items subject to the EAR. As noted above, BIS does not intend for license applicants to change their behavior for how they are currently structuring licenses, so this rule adds text to paragraph (c) to make it clear to license applicants that they may and are encouraged to continue with their current license application practices of including other firearms related items on license applications. However, to make this process more manageable for BIS, this rule specifies under paragraph (c) that the applicant must clearly identify the semiautomatic firearms controlled by ECCN 0A501.a. This requirement will assist BIS in identifying whether the license application requires congressional notification under § 743.6 and identifying the information that will need to be reported to Congress. As a conforming change to paragraph (c), this final rule also adds a new paragraph (bb) to supplement no. 2 to part 748—Unique Application and Submission Requirements of the EAR, so license applicants are aware of the additional support document requirements specified under § 743.6(c).

    Finally, this final rule adds paragraph (d) (Additional information), to provide an email that license applicants may use to ask questions regarding new § 743.6. As noted above, this final rule adds a new paragraph (bb) (Semiautomatic firearms controlled under ECCN 0A501.a) to supplement no. 2 to part 746 to assist public understanding of the requirement in § 743.6(c). New paragraph (bb) specifies that for export license applications that require prior notifications to Congress of exports of semiautomatic firearms controlled under ECCN 0A501.a under the criteria of § 743.6, the license applicant must include the information specified in § 743.6(c) of the EAR. This rule includes a parenthetical phrase in new paragraph (bb) to cross reference applicants back to § 743.6(c).

    This rule also adds a new general restriction on the use of EAR license exceptions under § 740.2 Restrictions on all license exceptions by adding paragraph (a)(23). New paragraph (a)(23) specifies exports of semiautomatic firearms controlled by ECCN 0A501.a sold under a contract that includes $4 million or more of such items are not eligible for any license exception other than exports to personnel and agencies of the U.S. Government under License Exception GOV (§ 740.11(b) of the EAR), for official use by an agency of NATO, or destined to a country listed in Country Groups A:5 or A:6 (see supplement no. 1 to part 740 of the EAR) except Mexico, South Africa, or Turkey. BIS added this restriction consistent with a similar license exception restriction that exists in § 740.2(a)(15) and (16) for “600 Series Major Defense Equipment” that requires congressional notification. New paragraph (a)(23) will ensure all exports that require a congressional notification under § 743.6 will require the submission of a BIS license with limited exceptions.

    BIS notes that the vast majority of firearms exported require a BIS license to be obtained. The EAR license exceptions that are available for semiautomatic firearms (as well as other firearms under 0A501.a and .b) are limited and the terms of those license exceptions, such as License Exception BAG (limited to three individually owned firearms), License Exception TMP (exporting a firearm to a trade show or sending to servicing or repair under paragraphs (a)(5) or (a)(6) is limited to 75 firearms), or License Exception RPL, impose additional conditions on the use of license exceptions. In addition, the likelihood of a semiautomatic firearm controlled under 0A501.a being exported in the limited quantity required under the license exceptions described above and meeting or exceeding the $4 million threshold would be extremely unlikely, unless each firearm was valued at a very high rate or there was some type of unusual circumstance, such as where a U.S. firearms manufacture had a defective product line that was exported to a distributor and all the firearms needed to be returned for warranty work for subsequent export. The only EAR license exception where a high dollar value export is likely would be under License Exception GOV for the United States Government under paragraphs (b)(2)(ii), but that is already excluded from the congressional notification requirement because of the U.S, government end user.

    This rule also adds a new paragraph (aa) (“600 Series Major Defense Equipment”) to supplement no. 2 to part 748 to assist public understanding of the requirement in § 743.5(d). The longstanding requirement in § 743.5(d) was added to the EAR on April 16, 2013 (78 FR 22722), but BIS determined it would still be beneficial to license applicants to include a new paragraph (aa) in supplement no. 2 to part 748 to make it easier to find this requirement, similar to what is described above for new paragraph (bb). New paragraph (aa) specifies that for export license applications that require prior notifications to congress of exports of “600 series major defense equipment” under the criteria of § 743.5, the license applicant must include the information specified in § 743.5(d) of the EAR. This rule includes a parenthetical phrase to cross reference applicants back to § 743.5(d).

    Lastly, as a clarification on the correct email address to use for “600 Series Major Defense Equipment,” this rule removes the email address of bis.compliance@bis.doc.gov in § 743.5(d) and adds a new email address of mcd_compliance@bis.doc.gov in its place.[2]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Adoption of Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR) rule states that OMB deemed this rule significant, but not economically significant:

    “ This final rule has been designated a “significant regulatory action”, under Executive Order 12866.[2] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Federal Register, "Adoption of Congressional Notification Requirement for Certain Semiautomatic Firearms Exports Under the Export Administration Regulations (EAR)," December 7, 2023.
    2. ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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