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Federal Register / Vol. 86, No. 58 / Monday, March 29, 2021 / Rules and Regulations
740.17. The reporting requirement also applies to non-mass market encryption commodities, software, and components that remain classified in ECCN 5A002, 5B002 or 5D002 following self-classification, provided these items are not further described by paragraph b2 or b3 of Section 740.17. A new note is added for this paragraph that defines executable software, as well as clarifies that executable software does not include complete binary images of the software running on an end-item, corresponding to similar notes in the Cryptography Note Note 3 to Category 5Part 2 in the CCL, Supplement No.
1 to part 774. Clarifying phrases are also added to this paragraph to indicate which non-mass market commodities and software still require selfclassification reporting. Under these revisions, mass market encryption items that fall under 740.17b1 no longer require classification by BIS or submission of a self-classification report except as noted above. There is no change to the classification or selfclassification reporting requirements for non-mass market encryption items controlled under ECCNs 5A002, 5B002
or 5D002. These revisions are estimated to produce a 60% reduction in encryption self-classification reports.

Export Control Reform Act of 2018

742.15 Encryption Items This rule renames and revises paragraph b2, regarding the notification requirement for publicly available encryption software, to eliminate email notification to BIS and the ENC Encryption Request Coordinator of such software except for non-standard cryptography. These revisions are estimated to produce an 80% reduction in notifications regarding publicly available encryption software.

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, distributive impacts, and equity. Executive Order 13563
emphasizes the importance of quantifying costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
This rule has been designated a significant regulatory action under Executive Order 12866.
This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

Category 5Part 2
This rule revises the Nota Bene N.B.
to Note 3 Cryptography Note by adding the word certain before mass market encryption commodities and software in the first sentence to indicate that as a result of this rule, not all mass market encryption requires classification by BIS or the submission of a self-classification report to be released from encryption items EI and national security NS controls of ECCN
5A002 or 5D002. A sentence is added to the end of this N.B. to clarify the status of mass market commodities and software that no longer require a selfclassification report, including that such items are released from EI and NS
controls of ECCN 5A002 or 5D002 but remain controlled under ECCN 5A992.c or 5D992.c.

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On August 13, 2018, the President signed the Export Control Reform Act of 2018 ECRA, 50 U.S.C. Sections 4801
4852, which provides the legal basis for BISs principal authorities and serves as the authority under which BIS issues this rule.
Savings Clause Shipments of items removed from license exception eligibility or eligibility for export, reexport or transfer incountry without a license as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on March 29, 2021, pursuant to actual orders for exports, reexports and transfers incountry to a foreign destination, may proceed to that destination under the previous license exception eligibility or without a license so long as they have been exported, reexported or transferred in-country before May 28, 2021. Any such items not actually exported, reexported or transferred in-country before midnight, on May 28, 2021, require a license in accordance with this final rule.
Executive Order Requirements
Paperwork Reduction Act Requirements Notwithstanding any other provision of law, no person is required to respond to, nor shall any person 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 OMB Control Number.

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This rule involves the following OMB-approved collections of information subject to the PRA: 0694
0088, Multi-Purpose Application which carries a burden hour estimate of 29.6 minutes for a manual or electronic submission; 06940137 License Exceptions and Exclusions, which carries a burden hour estimate average of 1.5 hours per submission Note:
Submissions for License Exceptions are rarely required; 06940096 Five Year Records Retention Period, which carries a burden hour estimate of less than 1 minute; and 06070152
Automated Export System AES
Program, which carries a burden hour estimate of 3 minutes per electronic submission. Specific license application submission estimates are discussed further in the preamble of this rule where the revisions are explained. BIS
estimates that revisions that are editorial e.g., moving the location of control text on the CCL, or that are clarifications will result in no change in license application submissions. Regarding the self-classification notifications for License Exception ENC under collection 0694137, 75% of encryption selfclassification notifications are now entirely mass market submissions. Of those mass market submissions, BIS
estimates that 80% of the encryption products in these submissions implement standards-based cryptography. Therefore, the elimination of encryption selfclassification notifications for encryption products that implement standards-based cryptography under License Exception ENC is anticipated to result in a 60% reduction of submissions. However, because all 18
license exceptions set forth in Part 740
of the EAR are bundled into one collection, the revisions included in this rule result in no change to the overall burden for collection 06940137.
Administrative Procedure Act and Regulatory Flexibility Act Requirements Pursuant to 4821 of ECRA, this action is exempt from the Administrative Procedure Act 5 U.S.C.
553 APA requirements for notice of proposed rulemaking, opportunity for public participation, and delay in the date of effectiveness.
Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the APA or by any other law, the analytical requirements of the Regulatory Flexibility Act 5 U.S.C. 601 et seq. are not applicable. Accordingly, no
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