© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Export Reforms Massachusetts Export Center Compliance Alliance Network Briefing Misty Rutter, Manager Export Controls Hewlett-Packard Company Date: 10/06/2011

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Export Control Reform Initiative The plan put forward and approved by President Obama in 2010: One Licensing Agency to process and adjudicate licenses currently processed by Dept. of State, Commerce and Treasury One tiered control list based on sensitivity of the items One system for submission, review and adjudication of all licenses –Based on DODs USXPORTS with Capability go lives: o State: August 2011 o Commerce: September 2011 o Treasury 2012 One Export Enforcement Agency (Export Enforcement Coordination Center at DHS) 2

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Three Phased Approach Make immediate improvements and create the framework Implement the framework within exiting agency structure Complete the transition through consolidation 3

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here DOD Review of the USML Protect the Crown Jewels – Ensure the protection of assets that give our warfighters a critical edge Build partnership capacity – Secure ties with Allies and partners; increase cooperation and collaboration Enhance and improve enforcement, monitoring, and intelligence capabilities – Deny exports to countries and entities of concern 4

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Final Rule Published June 16, 2011 (Federal Register Vol. 76 No.116) License Exception STA 36 Ally Countries Plus allows less sensitive items (NS Controls only) to additional 8 countries Must be destined for ultimate end use by the armed forces, police, paramilitary, law enforcement, customs and border protection, correctional, fire and search and rescue agencies of a government in one the designated countries. Not applicable for Encryption items Notification requirements – Exporter must notify consignee of ECCN Obtain Prior Consignee Statement Shipment Notification to Consignee of each shipment made under STA Can be used for Deemed Exports Keep a Log referencing applicable Consignee Statement 5

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Published in Federal Register July 15, 2011 (Volume 76, No. 136) Proposed Rule – USML to CCL Control of Items the President Determines No Longer Warrant Control Under the U.S. Munitions List (USML) Establishes framework to move less sensitive military items from the US Munitions List to the Commerce Control List 4 primary Categories of change –600 Series ECCNs – Creation of ECCN 0Y521 (Equivalent to USML Cat XXI) –Proposes single definition for Specially Designed and additional definitions – Other Changes to Assist in the Structural Alignment of the USML and CCL Replaces Dual Use with Items of Export to capture all items subject to EAR –Meant to include most dual use items, most commercial items and certain munitions items listed on the WAML classified under 600 series, ECCNs ending in 018 and ECCN 0A919 Note: 018 items will eventually consolidate into 600 Series CML 6

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Establishes the new 600 Series ECCN Commerce Munitions List For end items moved from the USML to the CCL that do not fit in an existing ECCN (controlled for more than just Antiterrorism AT controls only) Also Wassenaar Munitions items Existing xY018 items will be moved into 600 Series to create to combine Wassenaar Munitions Items with former USML items to create new CML structure These items would retain the existing other provisions such as China Military End Use restrictions Parts, components, accessories and attachments not called out on the revised USML Creates new ECCNs under each Category xY6zz format x = Category Y = Group zz = corresponds to Wassenaar Munitions List categories for easier tracking 7

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here 600 Series Restrictions on use of License Exceptions For xA6zz End Items LVS, TMP, RPL, GOV and STA only after submission of a License Exception STA eligibility request For Parts, Components, Accessories and Attachments or xB6zz and xC6zz items LVS, TMP, RPL, GOV and STA (no prior approval required) For xD6zz and xE6zz Software and Technology GOV, TSU, STA In all these cases GOV applicable only to the STA – 36 countries New Part adding semiannual reporting requirements for convention arms exports New Red Flags – one referring to STA and one referring to 600 Series to alert exports of additional due diligence requirements 8

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Commerce Munitions List (CML) End items will generally be controlled for NS Column 1 (National Security), RS Col 1 (Regional Stability), AT Col 1 (Anti-terrorism and UN Embargo controls License required for export or reexport to all countries except Canada (excluding certain items also controlled for MT, CB1 & FC reasons) But can apply for STA through license application process BIS will then publish those end items Items controlled for MT reasons not eligible for this procedure Items assigned to existing ECCNs retain Reasons for Control of that ECCN Licensing Review Policy General policy of denial for any country under a U.S. Arms Embargo –BIS will publish the list of countries in proposed 740.2(a)(12) 9

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Ground Vehicles – USML Cat VII Proposed revision to the USML Positive List incorporated into this rule Creates five new ECCN entries: 0A606, 0B606, 0C606, 0D606, and 0E606 along with consolidation of 9A018.b into 0A606.b.4 Clarifies which ground vehicles are subject to ITAR and which are EAR 10

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Specially Designed Proposed definition (Part 772.1) (a) A specially designed item, other than a part or component, is an item that is enumerated on the CCL and, as a result of development, has properties peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics, or functions of the referenced item identified in the CCL. (b) A specially designed part or component is a part or component of an item enumerated in a category of the CCL. (c) For the purposes of this definition, an item is not considered specially designed if it is separately enumerated in an USML subcategory or an ECCN that does not have specially designed as a control criterion. (d) Items that are not so separately enumerated for purposes of this definition, are also not considered Applicable to 600 Series, Existing ECCNs that use the term and Revised USML Categories that use the term Peculiarly responsible to this definition (currently only applies to technology) specially designed in any category of the CCL if they are: (1) A single, unassembled part used in multiple types of civil items, such as threaded fasteners (e.g., screws, bolts, nuts, nut plates, studs, inserts), other fasteners (e.g., clips, rivets, pins), common hardware (e.g., washers, spacers, insulators, grommets, bushings), springs and wire; or (2) An item specifically excluded from control on the USML or the CCL; or (3) A part or component used as a part or component of an end item in serial production and not enumerated on the USML or CCL (i.e., the end item is an EAR99 item), and the parts or components form, fit, and function have not been altered for use in another end item enumerated on the USML or CCL after serial production of the end-item not enumerated on the USML or CCL has begun; or (4) A part or component that can be exchanged with an EAR99 or AT only controlled part or component on a one-for-one replacement basis without modification to the form, fit and function of the EAR99 or AT-only part or component, and the EAR99 or AT-only parts or components function is identical to the part or component at issue. 11

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Specially Designed Proposal to have one definition that applies to 600 Series ECCNs, Existing ECCNs that use the term and revised USML Categories that use the term. 3 Notes to Definition 3Notes to Exclusions Other Definitions 600 Series, accessories and attachments, component, end item, equipment, facilities, part, serial production, system Also clarifying Materials as it applies to Product Groups A and C 12

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Parts and Components Automatically eligible for STA AT Controls only (+ China Military End Use) Specially Designed Components 600 Series (Subparagraph.x) Cull out insignificant parts and components (Subparagraph.y) 13

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here De Minimis Proposed rule establishes a more restrictive 10% de minimis level For CML 600 Series items incorporated into foreign-made items Applicable to xB6zz, xC6zz, xD6zz and xE6zz items As opposed to 25% level 14

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Placeholder Mechanism for Emerging Technologies OA521 Equivalent to USML Category XXI New category in which to place emerging technologies that might otherwise be classified as EAR99 Gives U.S. Government one year to review and seek multilateral control where appropriate (Maximum 3 one year periods) Create a Table for items identified as positively as possible in Supplement 5 to Part 744. Controlled for RS Col 1 reasons (License required to all countries except Canada) Only License Exception GOV applicable (STA countries) 15

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Rule Making DOD led review of the USML Positive List – Start with Categories 6-8 Category 11 (Electronics) early 2012 Requires Congressional Notification and Consent under Section 38(f) of AECA 2010 State Dept. Proposed rule on Military Vehicles (CAT VII) used as an example of the process. (Included in the Proposed Rule) –Once Congressional approvals in place and both agencies publish final rules, any Military Vehicles, specially designed parts, components, accessories and attachments, and related technology and software, not on the USML positive list will move to CCL Comment Period Closed September 13,

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Other Reg Changes Various updates with End user focus (VEUs – Additions and Revisions) India Bilateral Understanding Publicly Available Mass Market Encryption Wassenaar Arrangement 2010 High Performance Computers Addition of New State of Republic of South Sudan 17

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Publicly Available Mass Market Encryption Software Published January 7, 2011 (76 FR 1059) BIS removes two kinds of encryption software from the jurisdiction of the EAR: (1) Publicly available encryption software in object code with a symmetric key length greater than 64-bits that has been determined to be mass market software under §742.15(b) of the EAR and has been reclassified under ECCN 5D992; and (2) Publicly available encryption software in object code classified under ECCN 5D002 when the corresponding source code meets the criteria specified in §740.13(e) of the EAR (LE TSU). 18

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Wassenaar Arrangement 2010 Implementation rule published May 20, 2011 (76 FR 29610) This rule revised 53 ECCNs spanning all the Categories of the Commerce Control List, except Category 0. The biggest change in Category 3, where there was a total rewrite of the controls for analog to digital converter (ADC) and digital to analog converter (DAC). Other notable changes. Wassenaar Correction: Published June 14, 2011 (76 FR 34577) ECCN 2A101 Radial ball bearings – MT:1 and AT:1 In addition to editorial clean-up type fixes. 19

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here High Performance Computers Published: June 24, 2011(76 FR 36986) Implements the December 2009 WA Plenary Meeting (the Plenary) agreements that relate to Export Control Classification Number (ECCN) 4A003. Raised the Adjusted Peak Performance (APP) for digital computers. Moves Albania and Croatia from Computer Tier 3 to Computer Tier 1 in License Exception APP (§ of the EAR) 20

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here New HPC Numbers 21 What has changed?Old APPNew APPEAR Citation ECCN 4A WT1.5 WTSupp No. 1 to part 774 (CCL) ECCN 4A003: - AT entry - Notes 1and 2 in the License Requirements section, and - 4A003.b LE APP: deemed exports of development and production technology controlled by ECCN 4E001 and source code controlled by ECCN 4D001for foreign nationals 0.5 WT1.5 WT §740.7(c)(3)(ii) LE APP: deemed exports of development and production technology controlled by ECCN 4E001 and source code controlled by ECCN 4D001 for foreign nationals of Computer Tier 3 countries 0.1 WT0.5 WT740.7(d)(3)(i) De minimis for foreign-made computers when they contain U.S.-origin controlled semiconductors (other than memory circuits) classified under ECCN 3A001 and are destined to a country in Computer Tier 3 of Section of the EAR 0.75 WT1.5 WT§ 734.4(a)(1) Post shipment reporting requirement for high performance computer exports to destinations in Computer Tier 3, as well as exports of commodities used to enhance computers previously exported or reexported to Computer Tier 3 destinations 0.75 WT1.5 WT§ 743.2(b)

© Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Confidentiality label goes here Thank you