Encryption Export Controls: Revision of License Exception ENC and Mass Market Eligibility, Submission Procedures, Reporting Requirements, License Application Requirements, and Addition of Note 4 to Category 5, Part 2

The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR or Regulations) to modify the requirements of License Exception ENC, "Encryption Commodities, Software and Technology," and the requirements for qualifying an encryption item as mass market. BIS is also amending specific license requirements for encryption items. With respect to encryption products of lesser national security concern, this rule replaces the requirement to wait 30 days for a technical review before exporting such products and the requirement to file semi-annual post-export sales and distribution reports with a provision that allows immediate authorization to export and reexport these products after electronic submission to BIS of an encryption registration. A condition of this new authorization for less sensitive products is submission of an annual self-classification report on these commodities and software exported under License Exception ENC. With respect to most mass market encryption products, this rule similarly replaces the requirement to wait 30 days for a technical review before exporting and reexporting such products with a provision that allows immediate authorization to export and reexport these products after electronic submission to BIS of an encryption registration, subject to annual self-classification reporting for exported encryption products. Only a few categories of License Exception ENC and mass market encryption products will continue to require submission of a 30-day classification request. Encryption items that are more strictly controlled continue to be authorized for immediate export and reexport to most end-users located in close ally countries upon submission of an encryption registration and classification request to BIS. This rule also eases licensing requirements for the export and reexport of many types of technology necessary for the development and use of encryption products, except to countries subject to export or reexp