Revision and Clarification of Civil Monetary Penalty Provisions of the Export Administration Regulations, 44189-44190 [E6-12653]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of Industry and Security
• Industry and Security Bureau

[Federal Register Volume 71, Number 150 (Friday, August 4, 2006)]
[Rules and Regulations]
[Pages 44189-44190]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12653]



[[Page 44189]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 764

[Docket No. 060721198-6198-01]
RIN 0694-AD74


Revision and Clarification of Civil Monetary Penalty Provisions 
of the Export Administration Regulations

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This final rule amends the Export Administration Regulations 
(EAR) to clarify the civil monetary penalties that BIS may impose for 
violations of the EAR during periods when the EAR are continued under 
the Export Administration Act, of 1979, as amended, the International 
Emergency Economic Powers Act, as amended, or other statutory 
authority. BIS is revising the EAR to reflect amendments to the 
International Emergency Economic Powers Act made by the USA PATRIOT ACT 
Improvement and Reauthorization Act of 2005.

DATES: This rule is effective August 4, 2006.

FOR FURTHER INFORMATION CONTACT: Melissa B. Mannino, Chief, Enforcement 
and Litigation Division, Office of Chief Counsel for Industry and 
Security, Telephone: (202) 482-5301 or E-mail: MMANNINO@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Export Administration Act of 1979, as amended (EAA), which 
provided authority for promulgation of the EAR, included a date on 
which it would lapse. The EAA has lapsed and been renewed several times 
since its original enactment. At each lapse, the President has used his 
authority under the International Emergency Economic Powers Act (IEEPA) 
to continue in effect the EAR to the extent permissible by law. The 
most recent lapse of the EAA occurred on August 21, 2001. To address 
that lapse, the President, acting pursuant to IEEPA, issued Executive 
Order 13222 of August 17, 2001, which continued the EAR in effect. To 
keep the EAR in effect pursuant to IEEPA, the President has issued 
annual declarations stating that the emergency necessitating 
implementation of the EAR is continuing. Executive Order 13222 states, 
in part, that ``* * * all orders, regulations, licenses, and other 
forms of administrative action issued, taken, or continued in effect 
pursuant [to the EAA], shall remain in full force and effect as if 
issued or taken pursuant to this order, except that the provisions of 
sections 203(b)(2) and 206 [penalties] of [IEEPA] (50 U.S.C. 1702(b)(2) 
and 1705) shall control over any inconsistent provisions in the 
[EAR].'' Further, prior to the date of publication of this rule, the 
EAR provided that ``[i]n the event that any part of the EAR is not 
under the authority of the EAA, sanctions shall be limited to those 
provided by such other authority, but the provisions of this part and 
of part 766 of the EAR shall apply insofar as not inconsistent with 
that other authority.'' (15 CFR 764.3(a) n.1).
    Prior to publication of this rule, Sec.  764.3(a)(1)(i) of the EAR 
provided for imposition of monetary penalties authorized by the EAA as 
amended, i.e. a maximum of $100,000 for violations involving national 
security controls imposed under section 5 of the Export Administration 
Act of 1979 as amended and a maximum of $10,000 for any other 
violation. However, since August 21, 2001, the date of the most recent 
lapse of the EAA, civil monetary penalties for violations of the EAR 
have been governed by the penalties set forth in the IEEPA, as adjusted 
by Department of Commerce regulations issued pursuant to the Federal 
Civil Penalties Inflation Adjustment Act of 1990. The adjusted maximum 
amount was $11,000. On March 9, 2006, H.R. 3199, the USA PATRIOT ACT 
Improvement and Reauthorization Act of 2005, was enacted (Public Law 
109-177) and amended Section 206 of the International Emergency 
Economic Powers Act to raise the maximum civil monetary penalty to 
$50,000 per violation. Due to this increase in penalties, BIS is 
amending the EAR to clearly set forth the maximum civil monetary 
penalties it may impose for violations of the EAR. Hence, effective 
March 9, 2006, the increased IEEPA maximum civil monetary penalty of 
$50,000 applies to any violation of the EAR or any license, order or 
authorization issued thereunder that occurs when the EAA is in lapse 
and IEEPA is the authorizing statute.

Changes Made by This Rule

    This rule replaces the language in Sec.  764.3(a)(1)(i) that 
referred to the specific civil monetary penalty amounts authorized by 
the EAA with more general language explaining that a civil monetary 
penalty authorized by the EAA may be imposed, and in situations in 
which any provision of the EAR is continued by IEEPA or other 
authority, the maximum monetary civil penalty is that which is 
authorized by the applicable authority. This rule also removes the 
footnote to Sec.  764.3(a) because the clarification to Sec.  
764.3(a)(1)(i) obviates the need for the footnote.

Effects of These Changes

    The changes made by this rule provide that BIS may impose civil 
monetary penalties in the amount authorized by Public Law 109-177 which 
amended section 206 of IEEPA, among other laws. These changes clarify 
the source of authority for civil monetary penalties for violations of 
the EAR when the EAA has lapsed and the maximum amount of such 
penalties. This rule results in an explicit statement in the EAR that 
when any provision of the EAR is continued by IEEPA or other authority, 
the maximum civil monetary penalty is that which is authorized by the 
applicable authority. Therefore, for any violations of the EAR or 
license, order or authorization thereunder that occur on or after March 
9, 2006 when the EAA is in lapse and IEEPA is the authorizing statute, 
BIS may impose a civil monetary penalty of up to $50,000 per violation.

Rulemaking Requirements

    1. This rule has been determined to be not significant for the 
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to nor 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. This rule does not 
contain any collection of information that is subject to the Paperwork 
Reduction Act.
    3. This rule does not contain policies with federalism implications 
as this term is defined in Executive Order 13132.
    4. The Department finds that there is good cause under 5 U.S.C. 
553(b)(B) and 5 U.S.C. 553(d)(3) to waive the provisions of the 
Administrative Procedure Act requiring prior notice, the opportunity 
for public comment and 30-day delay in effectiveness. The changes made 
by this rule make clear that BIS may utilize any applicable statutory 
authority to impose civil penalties. Because the increase in IEEPA 
civil monetary penalties enacted in Public Law 109-177 became effective 
on March 9, 2006, BIS is revising the civil monetary penalty provision 
of the EAR

[[Page 44190]]

to conform with the statutory change and to avoid confusion as to what 
the actual maximum civil monetary penalty is, and therefore notice and 
public comment concerning this rule are unnecessary.
    Because notice of proposed rulemaking and opportunity for public 
comment are not required to be given for this rule under the 
Administrative Procedure Act or by any other law, the analytical 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
are not applicable.

List of Subjects in 15 CFR Part 764

    Administrative practice and procedure, Exports, Law enforcement, 
Penalties.


0
Accordingly, part 764 of the Export Administration Regulations (15 CFR 
parts 730-774) is amended as follows:

PART 764--[AMENDED]

0
1. The authority citation for part 764 is revised to read as follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 
2, 2005, 70 FR 45273 (August 5, 2005).


0
2. In Sec.  764.3, revise paragraph (a)(1)(i), remove footnote number 
1, and redesignate footnote 2 as footnote 1, to read as follows:


Sec.  764.3  Sanctions.

    (a) Administrative.
    (1) Civil monetary penalty.
    (i) A civil monetary penalty not to exceed the amount set forth in 
the EAA may be imposed for each violation, and in the event that any 
provision of the EAR is continued by IEEPA or any other authority, the 
maximum monetary civil penalty for each violation shall be that 
provided by such other authority.
* * * * *

    Dated: August 1, 2006.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. E6-12653 Filed 8-3-06; 8:45 am]
BILLING CODE 3510-33-P