Revisions to Authorization Validated End-User Provisions: Requirement for Notice of Export, Reexport, or Transfer (In-Country) and Clarification Regarding Termination of Conditions on VEU Authorizations, 22689-22691 [2012-9237]
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Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules
of the local flight standards district office/
certificate holding district office.
(3) An AMOC that provides an acceptable
level of safety may be used for any repair
required by this AD if it is approved by the
Boeing Commercial Airplanes Organization
Designation Authorization (ODA) that has
been authorized by the Manager, Seattle
ACO, to make those findings. For a repair
method to be approved, the repair must meet
the certification basis of the airplane, and the
approval must specifically refer to this AD.
Authorization Validated End-User
(VEU) to send written notice of such
shipments to the recipient VEU. BIS
further proposes to amend the EAR to
clarify that when items subject to itemspecific conditions under Authorization
VEU no longer require a license for
export or reexport or become eligible for
shipment under a license exception, as
set forth in the EAR, VEUs are no longer
bound by the conditions associated with
such items.
(k) Related Information
DATES: Comments must be received by
(1) For more information about this AD,
contact Wayne Lockett, Aerospace Engineer,
no later than June 18, 2012.
Airframe Branch, ANM–120S, FAA, Seattle
ADDRESSES: Comments on this rule may
Aircraft Certification Office (ACO), 1601 Lind
be submitted to the Federal rulemaking
Avenue SW., Renton, Washington 98057–
portal (https://www.regulations.gov). The
3356; phone: 425–917–6447; fax: 425–917–
regulations.gov ID for this rule is: BIS–
6590; email: wayne.lockett@faa.gov.
2012–0005. Comments may also be
(2) For service information identified in
submitted via email to
this AD, contact Boeing Commercial
Airplanes, Attention: Data & Services
publiccomments@bis.doc.gov or on
Management, P.O. Box 3707, MC 2H–65,
paper to Regulatory Policy Division,
Seattle, Washington 98124–2207; telephone
Bureau of Industry and Security, Room
206–544–5000, extension 1; fax 206–766–
2099B, U.S. Department of Commerce,
5680; email me.boecom@boeing.com; Internet
14th St. and Pennsylvania Ave. NW.,
https://www.myboeingfleet.com. You may
Washington, DC 20230. Please refer to
also review the referenced service
RIN 0694–AF19 in all comments and in
information in the docket at
the subject line of email comments.
www.regulations.gov (refer to Docket No.
FAA–2012–0336). You may review copies of
FOR FURTHER INFORMATION CONTACT:
the referenced service information at the
Karen H. Nies-Vogel, Chair, End-User
FAA, Transport Airplane Directorate, 1601
Review Committee, Bureau of Industry
Lind Avenue SW., Renton, Washington
and Security, U.S. Department of
98057–3356. For information on the
Commerce, 14th St. and Pennsylvania
availability of this material at the FAA, call
Avenue NW., Washington, DC 20230; by
425–227–1221.
telephone: (202) 482–5991, fax: (202)
Issued in Renton, Washington, on April 5,
482–3911, or email: ERC@bis.doc.gov.
2012.
SUPPLEMENTARY INFORMATION:
Ali Bahrami,
Background
Manager, Transport Airplane Directorate,
Aircraft Certification Service.
Authorization Validated End-User
(VEU)
[FR Doc. 2012–9177 Filed 4–16–12; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 748
[Docket No. 110331231–1608–02]
RIN 0694–AF19
wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
Revisions to Authorization Validated
End-User Provisions: Requirement for
Notice of Export, Reexport, or Transfer
(In-Country) and Clarification
Regarding Termination of Conditions
on VEU Authorizations
Bureau of Industry and
Security, Commerce.
ACTION: Proposed rule.
AGENCY:
In this rule, the Bureau of
Industry and Security (BIS) proposes to
amend the Export Administration
Regulations (EAR) by adding a
requirement for persons shipping under
SUMMARY:
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BIS amended the EAR in a final rule
on June 19, 2007 (72 FR 33646), to
create a new authorization for
‘‘validated end-users’’ (VEUs) located in
eligible destinations to which eligible
items may be exported, reexported, or
transferred (in-country) under a general
authorization instead of a license.
VEUs may obtain eligible items that
are on the Commerce Control List,
which are identified in Supplement No.
7 to part 748 of the EAR, without having
to wait for their suppliers to obtain
export licenses from BIS. Eligible items
may include commodities, software, and
technology, except those controlled for
missile technology or crime control
reasons.
The VEUs listed in Supplement No. 7
to part 748 of the EAR were reviewed
and approved by the U.S. Government
in accordance with the provisions of
section 748.15 and Supplement Nos. 8
and 9 to part 748 of the EAR. The EndUser Review Committee (ERC),
composed of representatives from the
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22689
Departments of State, Defense, Energy,
and Commerce, and other agencies, as
appropriate, is responsible for
administering the VEU program. A
unanimous vote by the ERC is required
to authorize VEU status for a candidate
or to add any eligible items to an
existing authorization. A majority vote
of the ERC is required to remove VEU
authorization or to remove eligible items
from an existing authorization.
In addition to U.S. exporters,
Authorization VEU may be used in
accordance with the provisions of the
EAR by foreign reexporters and by
persons transferring in-country. VEUs
are subject to regular reviews by the
U.S. Government to ensure that items
shipped under Authorization VEU are
used for civilian purposes. In addition,
VEUs are subject to on-site reviews as
warranted.
As of the date of this rule, pursuant
to section 748.15(b) of the EAR, VEUs
are located in the People’s Republic of
China (PRC) and India.
Amendments to Section 748.15 of the
EAR
Prior Notification Requirement
Through this rule, BIS proposes
amending the EAR by adding paragraph
(g)—Notification requirement—to
section 748.15—Authorization
Validated End-User. The new paragraph
(g) would require persons exporting,
reexporting, or transferring (in-country)
under Authorization VEU to send
written notification to the recipient VEU
with details about their shipment within
seven days of the shipment. Details that
would be required in the notification
include a list of the contents of the
shipment and the quantity of such items
that have been or will be shipped to the
respective VEUs under Authorization
VEU, as well as a list of the applicable
Export Control Classification Numbers
(ECCNs) for items included in the
shipment under Authorization VEU.
The purpose of this proposed new
requirement is to enhance the ability of
VEUs to comply with the requirements
of the VEU program. This amendment to
the EAR is not the result of noncompliance with VEU requirements by
existing VEUs. Rather, BIS proposes
making this change at the request of
VEUs. Some VEUs have informed BIS
that compliance is challenging when
they receive items under multiple
authorizations, but are unable to
determine which authorization is used
for each shipment, and thus determine
which set of conditions applies to the
items received in each shipment.
Because items may be shipped to VEUs
under different forms of authorization
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Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules
wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
(e.g., individual licenses, Special
Comprehensive Licenses, and
Authorization VEU), VEUs may receive
items classified under the same ECCN
but shipped under more than one form
of authorization. In addition, each form
of authorization may be accompanied by
different conditions with which endusers must comply. With this
amendment to the EAR, BIS intends to
improve the ability of VEUs to
determine which authorization their
suppliers utilized. This will enable
VEUs to better determine which set of
conditions governs their use of the
received item(s) more efficiently,
thereby increasing the VEUs’
compliance.
BIS is not mandating the form of
communication (e.g., fax, email, letter)
for the notification, but does require that
it be in a written format. As noted
above, the notification must be
conveyed to the VEU within seven
calendar days of shipment to the VEU.
Exporters, reexporters and VEUs are
required to maintain the notifications
they receive pursuant to their
recordkeeping requirements.
Clarification Regarding Termination of
Conditions on VEU Authorizations
In addition, BIS proposes amending
section 748.15—Authorization
Validated End-User—by adding
paragraph (h)—Termination of
Conditions on VEU Authorizations. The
new paragraph (h) clarifies that VEUs
who are subject to item-specific
conditions and have received items
subject to such conditions under
Authorization VEU would no longer be
bound by the conditions associated with
the items if the items no longer require
a license for export or reexport to the
PRC or India (depending on the VEU’s
location) or become eligible for
shipment under a license exception to
the destination. This proposed
amendment would be the same, in
effect, as existing section 750.7(i)
(Terminating license conditions), which
generally applies to exporters and
reexporters who have shipped under
license. In addition, a new paragraph (i)
is added to section 748.15 to remind
exporters that records requirements for
shipments that were made under
Authorization VEU prior to the removal
of a license requirement or the
availability of a license exception
remain subject to the review
requirements of paragraph (f)(2) of
section 748.15 on and after the date that
the license requirement was removed or
the license exception became
applicable.
Since August 21, 2001, the Export
Administration Act has been in lapse
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and the President, through Executive
Order 13222 of August 17, 2001 (3 CFR,
2001 Comp., p. 783 (2002)), as extended
most recently by the Notice of August
12, 2011 (76 FR 50661, August 16,
2011), has continued the EAR in effect
under the International Emergency
Economic Powers Act. BIS continues to
carry out the provisions of the Export
Administration Act, as appropriate and
to the extent permitted by law, pursuant
to Executive Order 13222.
Rulemaking Requirements
1. 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 both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This rule
has been determined to be not
significant for purposes of Executive
Order 12866.
2. Notwithstanding any other
provisions 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 proposed
rule involves information collections
previously approved by the OMB under
control number 0694–0088, ‘‘MultiPurpose Application’’, which carries a
burden hour estimate of 45.8 minutes to
prepare and submit form B18–748,
which involves requirements in
connection with Authorization VEU.
BIS revised the burden hour estimate
shown for the 0694–0088 collection by
two minutes to include the notification
requirement proposed in this rule. This
revision does not represent a significant
increase in burden hours for submitting
information under the collection. Also,
the notification requirement proposed
in this rule is not expected to result in
an increase in license applications
submitted to BIS should the agency
issue the amendment to the EAR in a
final rule subsequent to the close of the
proposed rule comment period.
3. This rule does not contain policies
with Federalism implications as that
term is defined under Executive Order
13132.
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4. The Chief Counsel for Regulation of
the Department of Commerce has
certified to the Chief Counsel for
Advocacy of the Small Business
Administration that this proposed rule,
if adopted in final form, would not have
a significant economic impact on a
substantial number of small entities.
Number of Small Entities
This proposed rule would affect
exporters and reexporters shipping to
VEUs, as well as persons making incountry transfers to VEUs, under
Authorization VEU. Currently, BIS does
not collect data on the size of entities
that export, reexport, or transfer incountry under Authorization VEU.
Although BIS is unable to estimate the
number of small entities that would be
affected by this rule, it does
acknowledge that this rule will impact
some unknown number.
Economic Impact
This proposed rule requires exporters
and reexporters shipping to VEUs, as
well as persons making in-country
transfers to VEUs, under Authorization
VEU to provide written notification to
approved VEUs about VEU shipments. It
would not require extensive efforts by
exporters or reexporters, or persons
making in-country transfers. The
proposed action is designed to coincide
with other standard communications
that exporters and reexporters,
regardless of size, provide to their
customers or parties to the transaction
regarding, among other things, the
description of items, sales terms, and
logistics. Specifically, this rule would
require only that exporters and
reexporters shipping eligible items
under Authorization VEU to the finite
number of approved VEUs at their
‘‘Eligible Destinations’’ in the PRC and
India ensure that those VEUs are
notified in writing within seven days of
shipping such items under the
Authorization. Practically, BIS does not
anticipate that any significant amount of
time or other resources would be used
to perform the proposed required action.
BIS estimates that the notification
requirement proposed in this rule will
increase the burden hour estimate by
two minutes per respondent. Also, the
notification requirement proposed in
this rule is not expected to result in an
increase in license applications
submitted to BIS should the agency
issue the amendment to the EAR in a
final rule subsequent to the close of the
proposed rule comment period.
The proposed requirement is intended
to facilitate compliance with the EAR in
general and Authorization VEU in
particular. The proposed requirement
E:\FR\FM\17APP1.SGM
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Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules
will facilitate the VEUs’ ability to
comply with the specific conditions
placed on their qualifications as VEUs
and distinguish those conditions from
conditions placed on items received
under other authorizations. This will
enhance accountability and ensuring
effective control of items shipped under
Authorization VEU and other
authorizations.
In addition, this action is likely to
enhance the attractiveness of shipping
‘‘Eligible Items’’ under Authorization
VEU for exporters and reexporters, or
persons making in-country transfers.
This potential benefit outweighs any
perceived inconvenience to exporters
and reexporters, or persons making incountry transfers, who ship under
Authorization VEU, as they retain the
option to ship under an individual
validated license.
In this rule, BIS also proposes to
amend section 748.15—Authorization
Validated End-User—by adding
paragraph (h)—Termination of
Conditions on VEU Authorizations. This
proposed amendment would clarify that
VEUs who are subject to item-specific
conditions and have received items
subject to such conditions under
Authorization VEU would no longer be
bound by the conditions associated with
the items if the items no longer require
a license for export or reexport to the
PRC or India (depending on the VEU’s
location) or become eligible for
shipment under a license exception to
the destination. This proposed
amendment would be the same, in
effect, as existing section 750.7(i)
(Terminating license conditions), which
generally applies to exporters and
reexporters who have shipped under
license.
For the reasons stated, the Chief
Counsel for Regulation of the
Department of Commerce has certified
to the Chief Counsel for Advocacy of the
Small Business Administration that this
proposed rule, if adopted in final form,
would not have a significant economic
impact on a substantial number of small
entities.
wreier-aviles on DSK5TPTVN1PROD with PROPOSALS
List of Subjects in 15 CFR Part 748
Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, part 748 of the Export
Administration Regulations (15 CFR
parts 730–774) is proposed to be
amended as follows:
PART 748—[AMENDED]
1. The authority citation for 15 CFR
part 748 continues to read as follows:
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22691
Authority: 50 U.S.C. app. 2401 et seq; 50
U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767,
3 CFR, 1996 Comp., p. 228; E.O. 13222, 66
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice
of August 12, 2011 (76 FR 50661 (August 16,
2011)).
DEPARTMENT OF THE TREASURY
2. Section 748.15 is amended by
adding paragraphs (g), (h) and (i) to read
as follows:
[REG–136008–11]
§ 748.15
(VEU).
Fees on Health Insurance Policies and
Self-Insured Plans for the PatientCentered Outcomes Research Trust
Fund
Authorization Validated End-User
*
*
*
*
*
(g) Notification requirement.
Exporters and reexporters shipping
under Authorization VEU and persons
transferring (in-country) under
Authorization VEU are required to
provide the validated end-users to
whom they are shipping notice of the
shipment. Such notification must be
conveyed to the VEU in writing and
must include a list of the contents of the
shipment and a list of the ECCNs under
which the items in the shipment are
classified, as well as a statement that the
shipment is, will be, or was made
pursuant to Authorization VEU.
Notification must be made within seven
calendar days of the export, reexport or
transfer (in-country) to the VEU.
Exporters, reexporters and VEUs are
required to maintain the notifications
they receive in accordance with their
recordkeeping requirements.
(h) Termination of Conditions on VEU
Authorizations. VEUs that are subject to
item-specific conditions and have
received items subject to such
conditions under Authorization VEU are
no longer bound by the conditions
associated with the items if the items no
longer require a license for export or
reexport to the PRC or India, as
applicable, or become eligible for
shipment under a license exception to
the destination. Termination of VEU
conditions does not relieve a validated
end-user of its responsibility for
violations that occurred prior to the
availability of a license exception or
prior to the removal of license
requirements.
(i) Records. Records of items that were
shipped under Authorization VEU prior
to the removal of a license requirement
or the availability of a license exception
remain subject to the review
requirements of paragraph (f)(2) of this
section on and after the date that the
license requirement was removed or the
license exception became applicable.
Dated: April 10, 2012.
Kevin J. Wolf,
Assistant Secretary for Export
Administration.
[FR Doc. 2012–9237 Filed 4–16–12; 8:45 am]
BILLING CODE 3510–33–P
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Internal Revenue Service
26 CFR Parts 40 and 46
RIN 1545–BK59
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of proposed rulemaking
and notice of public hearing.
AGENCY:
This document contains
proposed regulations that implement
and provide guidance on the fees
imposed by the Patient Protection and
Affordable Care Act on issuers of certain
health insurance policies and plan
sponsors of certain self-insured health
plans to fund the Patient-Centered
Outcomes Research Trust Fund. These
proposed regulations affect the issuers
and plan sponsors that are directed to
pay those fees. This document also
contains a request for comments and
provides notice of public hearing on
these proposed regulations.
DATES: Written or electronic comments
must be received by July 16, 2012.
Requests to speak and outlines of topics
to be discussed at the public hearing
scheduled for Wednesday, August 8,
2012, at 10 a.m., must be received by
July 30, 2012.
ADDRESSES: Send submissions to
CC:PA:LPD:PR (REG–136008–11),
Internal Revenue Service, P.O. Box
7604, Ben Franklin Station, Washington,
DC 20044. Submissions may be handdelivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (REG–136008–11),
Courier’s Desk Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent electronically
via the IRS Internet site via the Federal
eRulemaking Portal at
www.regulations.gov (IRS REG–136008–
11). The public hearing will be held in
the IRS Auditorium at the Internal
Revenue Building, 1111 Constitution
Avenue NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Concerning the proposed regulations,
Rebecca L. Baxter at (202) 622–3970
(regarding health insurance policies) or
R. Lisa Mojiri-Azad at (202) 622–6080
(regarding self-insured health
arrangements); concerning the
submission of comments or the public
hearing, Oluwafunmilayo (Funmi)
SUMMARY:
E:\FR\FM\17APP1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Proposed Rules]
[Pages 22689-22691]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9237]
=======================================================================
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 748
[Docket No. 110331231-1608-02]
RIN 0694-AF19
Revisions to Authorization Validated End-User Provisions:
Requirement for Notice of Export, Reexport, or Transfer (In-Country)
and Clarification Regarding Termination of Conditions on VEU
Authorizations
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this rule, the Bureau of Industry and Security (BIS)
proposes to amend the Export Administration Regulations (EAR) by adding
a requirement for persons shipping under Authorization Validated End-
User (VEU) to send written notice of such shipments to the recipient
VEU. BIS further proposes to amend the EAR to clarify that when items
subject to item-specific conditions under Authorization VEU no longer
require a license for export or reexport or become eligible for
shipment under a license exception, as set forth in the EAR, VEUs are
no longer bound by the conditions associated with such items.
DATES: Comments must be received by no later than June 18, 2012.
ADDRESSES: Comments on this rule may be submitted to the Federal
rulemaking portal (https://www.regulations.gov). The regulations.gov ID
for this rule is: BIS-2012-0005. Comments may also be submitted via
email to publiccomments@bis.doc.gov or on paper to Regulatory Policy
Division, Bureau of Industry and Security, Room 2099B, U.S. Department
of Commerce, 14th St. and Pennsylvania Ave. NW., Washington, DC 20230.
Please refer to RIN 0694-AF19 in all comments and in the subject line
of email comments.
FOR FURTHER INFORMATION CONTACT: Karen H. Nies-Vogel, Chair, End-User
Review Committee, Bureau of Industry and Security, U.S. Department of
Commerce, 14th St. and Pennsylvania Avenue NW., Washington, DC 20230;
by telephone: (202) 482-5991, fax: (202) 482-3911, or email:
ERC@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
Authorization Validated End-User (VEU)
BIS amended the EAR in a final rule on June 19, 2007 (72 FR 33646),
to create a new authorization for ``validated end-users'' (VEUs)
located in eligible destinations to which eligible items may be
exported, reexported, or transferred (in-country) under a general
authorization instead of a license.
VEUs may obtain eligible items that are on the Commerce Control
List, which are identified in Supplement No. 7 to part 748 of the EAR,
without having to wait for their suppliers to obtain export licenses
from BIS. Eligible items may include commodities, software, and
technology, except those controlled for missile technology or crime
control reasons.
The VEUs listed in Supplement No. 7 to part 748 of the EAR were
reviewed and approved by the U.S. Government in accordance with the
provisions of section 748.15 and Supplement Nos. 8 and 9 to part 748 of
the EAR. The End-User Review Committee (ERC), composed of
representatives from the Departments of State, Defense, Energy, and
Commerce, and other agencies, as appropriate, is responsible for
administering the VEU program. A unanimous vote by the ERC is required
to authorize VEU status for a candidate or to add any eligible items to
an existing authorization. A majority vote of the ERC is required to
remove VEU authorization or to remove eligible items from an existing
authorization.
In addition to U.S. exporters, Authorization VEU may be used in
accordance with the provisions of the EAR by foreign reexporters and by
persons transferring in-country. VEUs are subject to regular reviews by
the U.S. Government to ensure that items shipped under Authorization
VEU are used for civilian purposes. In addition, VEUs are subject to
on-site reviews as warranted.
As of the date of this rule, pursuant to section 748.15(b) of the
EAR, VEUs are located in the People's Republic of China (PRC) and
India.
Amendments to Section 748.15 of the EAR
Prior Notification Requirement
Through this rule, BIS proposes amending the EAR by adding
paragraph (g)--Notification requirement--to section 748.15--
Authorization Validated End-User. The new paragraph (g) would require
persons exporting, reexporting, or transferring (in-country) under
Authorization VEU to send written notification to the recipient VEU
with details about their shipment within seven days of the shipment.
Details that would be required in the notification include a list of
the contents of the shipment and the quantity of such items that have
been or will be shipped to the respective VEUs under Authorization VEU,
as well as a list of the applicable Export Control Classification
Numbers (ECCNs) for items included in the shipment under Authorization
VEU.
The purpose of this proposed new requirement is to enhance the
ability of VEUs to comply with the requirements of the VEU program.
This amendment to the EAR is not the result of non-compliance with VEU
requirements by existing VEUs. Rather, BIS proposes making this change
at the request of VEUs. Some VEUs have informed BIS that compliance is
challenging when they receive items under multiple authorizations, but
are unable to determine which authorization is used for each shipment,
and thus determine which set of conditions applies to the items
received in each shipment. Because items may be shipped to VEUs under
different forms of authorization
[[Page 22690]]
(e.g., individual licenses, Special Comprehensive Licenses, and
Authorization VEU), VEUs may receive items classified under the same
ECCN but shipped under more than one form of authorization. In
addition, each form of authorization may be accompanied by different
conditions with which end-users must comply. With this amendment to the
EAR, BIS intends to improve the ability of VEUs to determine which
authorization their suppliers utilized. This will enable VEUs to better
determine which set of conditions governs their use of the received
item(s) more efficiently, thereby increasing the VEUs' compliance.
BIS is not mandating the form of communication (e.g., fax, email,
letter) for the notification, but does require that it be in a written
format. As noted above, the notification must be conveyed to the VEU
within seven calendar days of shipment to the VEU. Exporters,
reexporters and VEUs are required to maintain the notifications they
receive pursuant to their recordkeeping requirements.
Clarification Regarding Termination of Conditions on VEU Authorizations
In addition, BIS proposes amending section 748.15--Authorization
Validated End-User--by adding paragraph (h)--Termination of Conditions
on VEU Authorizations. The new paragraph (h) clarifies that VEUs who
are subject to item-specific conditions and have received items subject
to such conditions under Authorization VEU would no longer be bound by
the conditions associated with the items if the items no longer require
a license for export or reexport to the PRC or India (depending on the
VEU's location) or become eligible for shipment under a license
exception to the destination. This proposed amendment would be the
same, in effect, as existing section 750.7(i) (Terminating license
conditions), which generally applies to exporters and reexporters who
have shipped under license. In addition, a new paragraph (i) is added
to section 748.15 to remind exporters that records requirements for
shipments that were made under Authorization VEU prior to the removal
of a license requirement or the availability of a license exception
remain subject to the review requirements of paragraph (f)(2) of
section 748.15 on and after the date that the license requirement was
removed or the license exception became applicable.
Since August 21, 2001, the Export Administration Act has been in
lapse and the President, through Executive Order 13222 of August 17,
2001 (3 CFR, 2001 Comp., p. 783 (2002)), as extended most recently by
the Notice of August 12, 2011 (76 FR 50661, August 16, 2011), has
continued the EAR in effect under the International Emergency Economic
Powers Act. BIS continues to carry out the provisions of the Export
Administration Act, as appropriate and to the extent permitted by law,
pursuant to Executive Order 13222.
Rulemaking Requirements
1. 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 both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been determined to be not significant for
purposes of Executive Order 12866.
2. Notwithstanding any other provisions 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 proposed rule
involves information collections previously approved by the OMB under
control number 0694-0088, ``Multi-Purpose Application'', which carries
a burden hour estimate of 45.8 minutes to prepare and submit form B18-
748, which involves requirements in connection with Authorization VEU.
BIS revised the burden hour estimate shown for the 0694-0088 collection
by two minutes to include the notification requirement proposed in this
rule. This revision does not represent a significant increase in burden
hours for submitting information under the collection. Also, the
notification requirement proposed in this rule is not expected to
result in an increase in license applications submitted to BIS should
the agency issue the amendment to the EAR in a final rule subsequent to
the close of the proposed rule comment period.
3. This rule does not contain policies with Federalism implications
as that term is defined under Executive Order 13132.
4. The Chief Counsel for Regulation of the Department of Commerce
has certified to the Chief Counsel for Advocacy of the Small Business
Administration that this proposed rule, if adopted in final form, would
not have a significant economic impact on a substantial number of small
entities.
Number of Small Entities
This proposed rule would affect exporters and reexporters shipping
to VEUs, as well as persons making in-country transfers to VEUs, under
Authorization VEU. Currently, BIS does not collect data on the size of
entities that export, reexport, or transfer in-country under
Authorization VEU. Although BIS is unable to estimate the number of
small entities that would be affected by this rule, it does acknowledge
that this rule will impact some unknown number.
Economic Impact
This proposed rule requires exporters and reexporters shipping to
VEUs, as well as persons making in-country transfers to VEUs, under
Authorization VEU to provide written notification to approved VEUs
about VEU shipments. It would not require extensive efforts by
exporters or reexporters, or persons making in-country transfers. The
proposed action is designed to coincide with other standard
communications that exporters and reexporters, regardless of size,
provide to their customers or parties to the transaction regarding,
among other things, the description of items, sales terms, and
logistics. Specifically, this rule would require only that exporters
and reexporters shipping eligible items under Authorization VEU to the
finite number of approved VEUs at their ``Eligible Destinations'' in
the PRC and India ensure that those VEUs are notified in writing within
seven days of shipping such items under the Authorization. Practically,
BIS does not anticipate that any significant amount of time or other
resources would be used to perform the proposed required action. BIS
estimates that the notification requirement proposed in this rule will
increase the burden hour estimate by two minutes per respondent. Also,
the notification requirement proposed in this rule is not expected to
result in an increase in license applications submitted to BIS should
the agency issue the amendment to the EAR in a final rule subsequent to
the close of the proposed rule comment period.
The proposed requirement is intended to facilitate compliance with
the EAR in general and Authorization VEU in particular. The proposed
requirement
[[Page 22691]]
will facilitate the VEUs' ability to comply with the specific
conditions placed on their qualifications as VEUs and distinguish those
conditions from conditions placed on items received under other
authorizations. This will enhance accountability and ensuring effective
control of items shipped under Authorization VEU and other
authorizations.
In addition, this action is likely to enhance the attractiveness of
shipping ``Eligible Items'' under Authorization VEU for exporters and
reexporters, or persons making in-country transfers. This potential
benefit outweighs any perceived inconvenience to exporters and
reexporters, or persons making in-country transfers, who ship under
Authorization VEU, as they retain the option to ship under an
individual validated license.
In this rule, BIS also proposes to amend section 748.15--
Authorization Validated End-User--by adding paragraph (h)--Termination
of Conditions on VEU Authorizations. This proposed amendment would
clarify that VEUs who are subject to item-specific conditions and have
received items subject to such conditions under Authorization VEU would
no longer be bound by the conditions associated with the items if the
items no longer require a license for export or reexport to the PRC or
India (depending on the VEU's location) or become eligible for shipment
under a license exception to the destination. This proposed amendment
would be the same, in effect, as existing section 750.7(i) (Terminating
license conditions), which generally applies to exporters and
reexporters who have shipped under license.
For the reasons stated, the Chief Counsel for Regulation of the
Department of Commerce has certified to the Chief Counsel for Advocacy
of the Small Business Administration that this proposed rule, if
adopted in final form, would not have a significant economic impact on
a substantial number of small entities.
List of Subjects in 15 CFR Part 748
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, part 748 of the Export Administration Regulations (15
CFR parts 730-774) is proposed to be amended as follows:
PART 748--[AMENDED]
1. The authority citation for 15 CFR part 748 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq; 50 U.S.C. 1701 et seq.;
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 12, 2011 (76
FR 50661 (August 16, 2011)).
2. Section 748.15 is amended by adding paragraphs (g), (h) and (i)
to read as follows:
Sec. 748.15 Authorization Validated End-User (VEU).
* * * * *
(g) Notification requirement. Exporters and reexporters shipping
under Authorization VEU and persons transferring (in-country) under
Authorization VEU are required to provide the validated end-users to
whom they are shipping notice of the shipment. Such notification must
be conveyed to the VEU in writing and must include a list of the
contents of the shipment and a list of the ECCNs under which the items
in the shipment are classified, as well as a statement that the
shipment is, will be, or was made pursuant to Authorization VEU.
Notification must be made within seven calendar days of the export,
reexport or transfer (in-country) to the VEU. Exporters, reexporters
and VEUs are required to maintain the notifications they receive in
accordance with their recordkeeping requirements.
(h) Termination of Conditions on VEU Authorizations. VEUs that are
subject to item-specific conditions and have received items subject to
such conditions under Authorization VEU are no longer bound by the
conditions associated with the items if the items no longer require a
license for export or reexport to the PRC or India, as applicable, or
become eligible for shipment under a license exception to the
destination. Termination of VEU conditions does not relieve a validated
end-user of its responsibility for violations that occurred prior to
the availability of a license exception or prior to the removal of
license requirements.
(i) Records. Records of items that were shipped under Authorization
VEU prior to the removal of a license requirement or the availability
of a license exception remain subject to the review requirements of
paragraph (f)(2) of this section on and after the date that the license
requirement was removed or the license exception became applicable.
Dated: April 10, 2012.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2012-9237 Filed 4-16-12; 8:45 am]
BILLING CODE 3510-33-P
