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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations Trump announced a change in the policy of the United States regarding exports of UAS July 24, 2020 Revised UAS Export Policy. In this final rule, consistent with this revised policy, the U.S. Government is amending the licensing policy of the United States to allow greater flexibility in the export or reexport of certain MTCR Category I
UAS subject to the Export Administration Regulations EAR.
Pursuant to this revision, the United States will invoke its national discretion on the implementation of the MTCRs strong presumption of denial to treat a subset of MTCR Category I UAS, i.e., those that have a range and payload capability equal to or greater than 300
km/500 kg but a maximum true airspeed of less than 800 km/hr, as Category II
UAS for export licensing review purposes, which are generally subject to a more flexible case-by-case review. BIS
is accordingly amending 742.5
Missile Technology of the EAR to review license applications involving such UAS, as well as MT items for the design, development, production, or use in such systems, under a case-by-case review policy.
While the updated policy of the United States refers to the term UAS, the MTCR and the EAR use the term Unmanned Aerial Vehicle UAV. The change in licensing policy set forth in revised 742.5 of the EAR consequently uses the term UAV.
In making this licensing review policy change, the U.S. Government is exercising its national discretion as a member of the MTCR. This change will strengthen U.S. national security by improving the capabilities of U.S.
partners and will increase U.S.
economic security by opening the expanding UAS market to U.S. industry.
The U.S. Government is implementing the July 24, 2020 Revised UAS Policy as a responsible and reasonable approach to technological change, establishing a systematic framework for implementation of the MTCRs strong presumption of denial for export licensing review purposes as applied to a particular subset of MTCR Category I
UAS. This subset of UAS is widely used in intelligence, surveillance, and reconnaissance ISR missions and various commercial and other applications not involving WMD
delivery, so a case-by-case license review policy is warranted.
The United States takes seriously both its nonproliferation commitments and its responsibility to ensure that exports and reexports and subsequent use of all U.S.-origin UAS are conducted responsibly, with appropriate end users and for appropriate end uses. To this
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end, UAS that fall within this subset of Category I UAS will continue to be subject to a strong presumption of denial if they are intended for use as WMD delivery systems, or if they present a risk of diversion to such an end use.
This approach will maintain particular restraint on exports and reexports of those UAS that present higher risk for WMD deliverysuch as cruise missiles, hypersonic aerial vehicles, and advanced unmanned combat aerial vehicleswithout unduly impeding exports for growing commercial and conventional military applications. Finally, the United States notes that while all MTCR-related concerns are considered when reviewing a potential export or reexport of all UAS, the decision to approveor not approvesuch an export or reexport is a whole-of-government decision that takes into account all relevant factors and policies, including U.S. national security, nonproliferation, and foreign policy objectives, as well as the recipient countrys capability and willingness to effectively and responsibly use and safeguard U.S.origin items, including technology, in accordance with U.S. laws and policies.
Amendments to the Export Administration Regulations EAR
This final rule revises the EARs missile technology controls to reflect the July 24, 2020 Revised UAS Export Policy. Specifically, in 742.5 of the EAR Missile technology, this final rule revises paragraph b1 to add a new licensing review policy for UAVs with a specified range, payload, and maximum true airspeed by adding a new Note to paragraph b1. The new Note to paragraph b1 added by this final rule specifies that UAV systems that have a range and payload capability equal to or greater than 300 km/500 kg, but a maximum true airspeed of less than 800 km/hr, and MT items for use in UAV systems that meet these parameters, will not be subject to a policy of denial. Instead, such UAV
systems will be reviewed on a case-bycase basis to determine whether the export or reexport will be used in support of WMD activities or military activities contrary to U.S. national security, or whether there is a risk of diversion to such activities. In addition, the same, more flexible, review policy will apply under the new note to MTcontrolled parts and components and other MT items for the design, development, production, or use see 772.1 of the EAR 15 CFR part 772Definitions of Terms of UAV
systems that meet these parameters,
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including foreign-made UAV systems that do so whether or not the foreignmade systems are or will be subject to the EAR.
BIS estimates that this licensing review policy change will result in an increase of twenty license applications submitted annually to BIS. This increase is anticipated because certain exporters that previously may have been deterred from applying for a license as a result of the more restrictive license review policy in place prior to this rule may now be motivated to apply for licenses under the new case-by-case license review policy. In addition, in making this estimate, BIS took into account the fact that the current number of commercial U.S. UAVs with the capability described in this final rule is rather small. Consequently, under the new, more flexible license review policy, the anticipated increase in the number of license applications will be minimal.
This final rule also makes a conforming technical change by revising the second sentence in paragraph b1
of 742.5 to add double quotation marks around the term parts part is a defined term in the EAR and to add after it the term components component is also a defined term in the EAR. These technical edits clarify that the review standard applies to replacement parts and components for use in the specified applications i.e., manned aircraft, satellite, land vehicle, or marine vessel.
Export Control Reform Act of 2018
On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018
ECRA 50 U.S.C. 48014852. ECRA
provides the legal basis for BISs principal authorities and serves as the authority under which BIS issues this rule.
Executive Order Requirements Executive Orders 13563 and 12866
direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distribute impacts, and equity.
Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated a significant regulatory action under Executive Order 12866.

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