PART 768—FOREIGN AVAILABILITY DETERMINATION PROCEDURES AND CRITERIA Authority: 50 U.S.C. 4601 et seq.; et seq.; Source: 61 FR 12915, Mar. 25, 1996, unless otherwise noted. § 768.1 Introduction. In this part, references to the Export Administration Regulations (EAR) are references to 15 CFR chapter VII, subchapter C. (a) Authority. (b) Scope. (c) Types of programs. (1) Foreign availability to controlled countries. (2) Foreign availability to non-controlled countries. (d) Definitions. Allegation. Assessment. Assessment criteria. Available-in-fact. Claimant. Comparable quality. Controlled countries. Decontrol. Decontrol assessment. Denied license assessment. Determination. Expedited licensing procedure eligibility evaluation. Expedited licensing procedures. Foreign availability submission (FAS). Item. Items eligible for non-controlled country expedited licensing procedures. National Security Override (NSO). Non-controlled countries. Non-U.S. source/foreign source. Reasonable evidence. Reliable evidence. Secretary. Similar quality. Sufficient quantity. Technical Advisory Committee (TAC). TAC certification. [61 FR 12915, Mar. 25, 1996, as amended at 61 FR 68585, Dec. 30, 1996; 62 FR 25469, May 9, 1997] § 768.2 Foreign availability described. (a) Foreign availability. (b) Types of foreign availability. (1) Foreign availability to a controlled country; and (2) Foreign availability to a non-controlled country. Note to paragraph ( b See § 768.7 of this part for delineation of the foreign availability assessment procedures, and § 768.6 of this part for the criteria used in determining foreign availability. § 768.3 Foreign availability assessment. (a) Foreign availability assessment. (b) Types of assessments. (1) Denied license assessment; and (2) Decontrol assessment. (c) Expedited licensing procedures. [61 FR 12915, Mar. 25, 1996, as amended at 61 FR 68585, Dec. 30, 1996] § 768.4 Initiation of an assessment. (a) Assessment request. (b) Denied license assessment. (c) Decontrol assessment. (2) A TAC may request that BIS initiate a decontrol assessment at any time by submitting a TAC Certification to BIS that there is foreign availability to a controlled country for items that fall within the area of the TAC's technical expertise. (3) The Secretary, on his/her own initiative, may initiate a decontrol assessment. (d) BIS mailing address. [61 FR 12915, Mar. 25, 1996, as amended at 72 FR 25196, May 4, 2007] § 768.5 Contents of foreign availability submissions and Technical Advisory Committee certifications. (a) All foreign availability submissions must contain, in addition to information on product or technology alleged to be available from foreign sources, at least: (1) The name of the claimant; (2) The claimant's mailing and business address; (3) The claimant's telephone number; and (4) A contact point and telephone number. (b) Foreign availability submissions and TAC certifications should contain as much evidence as is available to support the claim, including, but not limited to: (1) Product names and model designations of the items alleged to be comparable; (2) Extent to which the alleged comparable item is based on U.S. technology; (3) Names and locations of the non-U.S. sources and the basis for claiming that the item is a non-U.S. source item; (4) Key performance elements, attributes, and characteristics of the items on which a qualitative comparison may be made; (5) Non-U.S. source's production quantities and/or sales of the alleged comparable items and marketing efforts; (6) Estimated market demand and the economic impact of the control; (7) Product names, model designations, and value of U.S. controlled parts and components incorporated in the items alleged to be comparable; and (8) The basis for the claim that the item is available-in-fact to the country or countries for which foreign availability is alleged. (c) Supporting evidence of foreign availability may include, but is not limited to, the following: (1) Foreign manufacturers' catalogs, brochures, operation or maintenance manuals; (2) Articles from reputable trade and technical publications; (3) Photographs; (4) Depositions based on eyewitness accounts; and (5) Other credible evidence. Note to paragraph ( c See supplement no. 1 to part 768 for additional examples of supporting evidence. (d) Upon receipt of a FAS or TAC certification, BIS will review it to determine whether there is sufficient evidence to support the belief that foreign availability may exist. If BIS determines the FAS or TAC certification is lacking in supporting evidence, BIS will seek additional evidence from appropriate sources, including the claimant or TAC. BIS will initiate the assessment when it determines that it has sufficient evidence that foreign availability may exist. Claimant and TAC certified assessments will be deemed to be initiated as of the date of such determination. (e) Claimants and TACs are advised to review the foreign availability assessment criteria described in § 768.6 of this part and the examples of evidence described in supplement no. 1 to part 768 when assembling supporting evidence for inclusion in the FAS or TAC certification. § 768.6 Criteria. BIS will evaluate the evidence contained in a FAS or TAC certification and all other evidence gathered in the assessment process in accordance with certain criteria that must be met before BIS can recommend a positive determination to the Secretary. The criteria are defined in § 768.1(d) of this part. In order to initiate an assessment, each FAS and TAC certification should address each of these criteria. The criteria are statutorily prescribed and are: (a) Available-in-fact; (b) Non-U.S. source; (c) Sufficient quantity; and (d) Comparable quality. § 768.7 Procedures. (a) Initiation of an assessment. (2) BIS will publish a Federal Register (3) BIS will notify the Departments of Defense and State, the intelligence community, and any other departments, agencies and their contractors that may have information concerning the item on which BIS has initiated an assessment. Each such department, agency, and contractor shall provide BIS all relevant information concerning the item. BIS will invite interested departments and agencies to participate in the assessment process (See paragraph (e) of this section). (b) Data gathering. (c) Analysis. (d) Recommendation and determination. (2) BIS will recommend on the basis of its analysis that the Secretary determine that foreign availability exists to a country when the available evidence demonstrates that an item of comparable quality is available-in-fact to the country, from non-U.S. sources, in sufficient quantity so that continuation of the existing national security export control, or denial of the license application in question on national security grounds, would be ineffective in achieving its purpose. For a controlled country, such control or denial is “ineffective” when comparable items are available-in-fact from foreign sources in sufficient quantities so that maintaining such control or denying a license would not be effective in restricting the availability of items that would make a significant contribution to the military potential of any country or combination of countries detrimental to the national security of the United States. (3) The Secretary will make the determination of foreign availability on the basis of the BIS assessment and recommendation; the Secretary's determination will take into account the evidence provided to BIS, the recommendations of the Secretaries of Defense and State and any other interested agencies, and any other information that the Secretary considers relevant. (4) For all decontrol and denied license assessments (under section 5(f)(3) of the EAA) initiated by a FAS, the Secretary will make a determination within 4 months of the initiation of the assessment and will notify the claimant. The Secretary will submit positive determinations for review to the appropriate departments and agencies. (5) The deadlines for determinations based on self-initiated and TAC-initiated assessments are different from the deadlines for claimant-initiated assessments (see paragraphs (f)(2) and (f)(3) of this section). (e) Interagency review. (f) Notification. Federal Register (i) Foreign availability exists, and (A) The requirement of a license has been removed or the license application in question has been approved; or (B) The President has determined that for national security purposes the export controls must be maintained or the license application must be denied, notwithstanding foreign availability, and that appropriate steps to eliminate the foreign availability are being initiated; or (C) In the case of an item controlled multilaterally under the former COCOM regime, the U.S. Government will conduct any necessary consultations concerning the proposed decontrol or approval of the license with the former COCOM regime for a period of up to 4 months from the date of the publication of the determination in the Federal Register (ii) Foreign availability does not exist. (2) For all TAC certification assessments, the Secretary will make a foreign availability determination within 90 days following initiation of the assessment. BIS will prepare and submit a report to the TAC and to the Congress stating that: (i) The Secretary has found foreign availability and has removed the license requirement; or (ii) The Secretary has found foreign availability, but has recommended to the President that negotiations be undertaken to eliminate the foreign availability; or (iii) The Secretary has not found foreign availability. (3) There is no statutory deadline for assessments self-initiated by the Secretary or for the resulting determination. However, BIS will make every effort to complete such assessments and determinations promptly. (g) Foreign availability to controlled countries. (h) Foreign availability to non-controlled countries. (i) Negotiations to eliminate foreign availability. (2) There are two types of National Security Overrides: (i) An NSO of a determination of foreign availability resulting from an assessment initiated pursuant to section 5(f) of the EAA (claimant and self-initiated assessments); and (ii) An NSO of a determination of foreign availability resulting from an assessment initiated pursuant to section 5(h) of the EAA (TAC-certification assessments). (3) For an NSO resulting from an assessment initiated under section 5(f) of the EAA, the Secretary of any agency may recommend that the President exercise the authority under the EAA to retain the controls or deny the license notwithstanding the finding of foreign availability. (4) For an NSO resulting from an assessment initiated under section 5(h) of the EAA, the Secretary of Commerce may recommend that the President exercise the authority under the EAA to retain the controls notwithstanding the finding of foreign availability. (5) Under an NSO resulting from an assessment initiated under section 5(f) of the EAA, the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on International Relations of the House of Representatives will be notified of the initiation of the required negotiations. The notice will include an explanation of the national security interest that necessitates the retention of controls. (6) Under an NSO resulting from an assessment initiated under section 5(f) of the EAA, BIS will publish notices in the Federal Register (i) The Secretary's determination of foreign availability; (ii) The President's decision to exercise the NSO; (iii) A concise statement of the basis for the President's decision; and (iv) An estimate of the economic impact of the decision. (7) The 6 month effective period for an NSO may be extended up to an additional 12 months if, prior to the end of the 6 months, the President certifies to Congress that the negotiations are progressing, and determines that the absence of the controls would continue to be detrimental to the United States national security. (8) After the conclusion of negotiations, BIS will retain the control only to the extent that foreign availability is eliminated. If foreign availability is not eliminated, BIS will decontrol the item by removing the requirement for a license for the export of the item to the destinations covered by the assessment. To the extent that the negotiations are successful and the foreign availability is eliminated, BIS will remove the license requirement for the export of the item to any country that has agreed to eliminate foreign availability. (j) Changes in foreign availability. Federal Register § 768.8 Eligibility of expedited licensing procedures for non-controlled countries. (a) BIS determines the eligibility of an item for expedited licensing procedures on the basis of an evaluation of the foreign availability of the item. Eligibility is specific to the items and the countries to which they are found to be available. (b) BIS will initiate an eligibility evaluation: (1) On its own initiative; (2) On receipt of a FAS; or (3) On receipt of a TAC certification. (c) Upon initiation of an eligibility evaluation following receipt of either a FAS or TAC certification, BIS will notify the claimant or TAC of the receipt and initiation of an evaluation and publish a Federal Register (d) The criteria for determining eligibility for expedited licensing procedures are: (1) The item must be available-in-fact to the specified non-controlled country from a foreign source; (2) The item must be of a quality similar to that of the U.S.-controlled item; and (3) The item must be available-in-fact to the specified non-controlled country without effective restrictions. (e) Within 30 days of initiation of the evaluation, the Secretary of Commerce will make a determination of foreign availability on the basis of the BIS evaluation and recommendation, taking into consideration the evidence the Secretaries of Defense, State, and other interested agencies provide to BIS and any other information that the Secretary considers relevant. (f) Within 30 days of the receipt of the FAS or TAC certification, BIS will publish the Secretary's determination in the Federal Register, (g) Following completion of a self-initiated evaluation, BIS will be notified of the Secretary's determination and, where appropriate, supplement no. 2 to part 768 will be amended. (h) Foreign availability submissions and TAC certifications to initiate an expedited licensing procedure evaluation must be clearly designated on their face as a request for expedited licensing procedure and must specify the items, quantities and countries alleged eligible. Submissions and certifications should be sent to: Department of Commerce, Bureau of Industry and Security, Room H-1093, 14th Street and Pennsylvania Avenue, NW., Washington, DC 20230. [61 FR 12915, Mar. 25, 1996, as amended at 72 FR 25196, May 4, 2007] § 768.9 Appeals of negative foreign availability determinations. Appeals of negative determinations will be conducted according to the standards and procedures described in part 756 of the EAR. A Presidential decision (NSO) to deny a license or continue controls notwithstanding a determination of foreign availability is not subject to appeal. § 768.10 Removal of controls on less sophisticated items. Where the Secretary has removed national security controls on an item for foreign availability reasons, the Secretary will also remove controls on similar items that are controlled for national security reasons and whose functions, technological approach, performance thresholds, and other attributes that form the basis for national security export controls do not exceed the technical parameters of the item that BIS has decontrolled for foreign availability reasons. Supplement No. 1 to Part 768—Evidence of Foreign Availability This supplement provides a list of examples of evidence that the Bureau of Industry and Security (BIS) has found to be useful in conducting assessments of foreign availability. A claimant submitting evidence supporting a claim of foreign availability should review this list for suggestions as evidence is collected. Acceptable evidence indicating possible foreign availability is not limited to these examples, nor is any one of these examples, usually, in and of itself, necessarily sufficient to meet a foreign availability criterion. A combination of several types of evidence for each criterion usually is required. A Foreign Availability Submission (FAS) should include as much evidence as possible on all four of the criteria listed below. BIS combines the submitted evidence with the evidence that it collects from other sources. BIS evaluates all evidence, taking into account factors that may include, but are not limited to: Information concerning the source of the evidence, corroborative or contradictory indications, and experience concerning the reliability or reasonableness of such evidence. BIS will assess all relevant evidence to determine whether each of the four criteria has been met. Where possible, all information should be in writing. If information is based on third party documentation, the submitter should provide such documentation to BIS. If information is based on oral statements a third party made, the submitter should provide a memorandum of the conversation to BIS if the submitter cannot obtain a written memorandum from the source. BIS will amend this informational list as it identifies new examples of evidence. (a) Examples of evidence of foreign availability: The following are intended as examples of evidence that BIS will consider in evaluating foreign availability. BIS will evaluate all evidence according to the provisions in § 768.7(c) of this part in order for it to be used in support of a foreign availability determination. This list is illustrative only. (1) Available-in-fact: (i) Evidence of marketing of an item in a foreign country (e.g., an advertisement in the media of the foreign country that the item is for sale there); (ii) Copies of sales receipts demonstrating sales to foreign countries; (iii) The terms of a contract under which the item has been or is being sold to a foreign country; (iv) Information, preferably in writing, from an appropriate foreign government official that the government will not deny the sale of an item it produces to another country in accordance with its laws and regulations; (v) Information, preferably in writing, from a named company official that the company legally can and would sell an item it produces to a foreign country; (vi) Evidence of actual shipments of the item to foreign countries (e.g., shipping documents, photographs, news reports); (vii) An eyewitness report of such an item in operation in a foreign country, providing as much information as available, including where possible the make and model of the item and its observed operating characteristics; (viii) Evidence of the presence of sales personnel or technical service personnel in a foreign country; (ix) Evidence of production within a foreign country; (x) Evidence of the item being exhibited at a trade fair in a foreign country, particularly for the purpose of inducing sales of the item to the foreign country; (xi) A copy of the export control laws or regulations of the source country, showing that the item is not controlled; or (xii) A catalog or brochure indicating the item is for sale in a specific country. (2) Foreign (non-U.S.) source: (i) Names of foreign manufacturers of the item including, if possible, addresses and telephone numbers; (ii) A report from a reputable source of information on commercial relationships that a foreign manufacturer is not linked financially or administratively with a U.S. company; (iii) A list of the components in the U.S. item and foreign item indicating model numbers and their sources; (iv) A schematic of the foreign item identifying its components and their sources; (v) Evidence that the item is a direct product of foreign technology (e.g., a patent law suit lost by a U.S. producer, a foreign patent); (vi) Evidence of indigenous technology, production facilities, and the capabilities at those facilities; or (vii) Evidence that the parts and components of the item are of foreign origin or are exempt from U.S. licensing requirements by the parts and components provision § 732.4 of the EAR. (3) Sufficient quantity: (i) Evidence that foreign sources have the item in serial production; (ii) Evidence that the item or its product is used in civilian applications in foreign countries; (iii) Evidence that a foreign country is marketing in the specific country an item of its indigenous manufacture; (iv) Evidence of foreign inventories of the item; (v) Evidence of excess capacity in a foreign country's production facility; (vi) Evidence that foreign countries have not targeted the item or are not seeking to purchase it in the West; (vii) An estimate by a knowledgeable source of the foreign country's needs; or (viii) An authoritative analysis of the worldwide market (i.e., demand, production rate for the item for various manufacturers, plant capacities, installed tooling, monthly production rates, orders, sales and cumulative sales over 5-6 years). (4) Comparable quality: (i) A sample of the foreign item; (ii) Operation or maintenance manuals of the U.S. and foreign items; (iii) Records or a statement from a user of the foreign item; (iv) A comparative evaluation, preferably in writing, of the U.S. and foreign items by, for example, a western producer or purchaser of the item, a recognized expert, a reputable trade publication, or independent laboratory; (v) A comparative list identifying, by manufacturers and model numbers, the key performance components and the materials used in the item that qualitatively affect the performance of the U.S. and foreign items; (vi) Evidence of the interchangeability of U.S. and foreign items; (vii) Patent descriptions for the U.S. and foreign items; (viii) Evidence that the U.S. and foreign items meet a published industry, national, or international standard; (ix) A report or eyewitness account, by deposition or otherwise, of the foreign item's operation; (x) Evidence concerning the foreign manufacturers' corporate reputation; (xi) Comparison of the U.S. and foreign end item(s) made from a specific commodity, tool(s), device(s), or technical data; or (xii) Evidence of the reputation of the foreign item including, if possible, information on maintenance, repair, performance, and other pertinent factors. Supplement No. 2 to Part 768—Items Eligible for Expedited Licensing Procedures [Reserved]