Proposed Amendments to the Export Administration Regulations: Removal of Special Comprehensive License Provisions, 58704-58709 [2014-23078]
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Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Proposed Rules
PART 150—EXEMPTIONS AND
CONTINUED REGULATORY
AUTHORITY IN AGREEMENT STATES
AND IN OFFSHORE WATERS UNDER
SECTION 274
14. The authority citation for part 150
continues to read as follows:
■
Authority: Atomic Energy Act secs. 161,
181, 223, 234 (42 U.S.C. 2201, 2021, 2231,
2273, 2282); Energy Reorganization Act sec.
201 (42 U.S.C. 5841); Government Paperwork
Elimination Act sec. 1704 (44 U.S.C. 3504
note); Energy Policy Act of 2005, Pub. L.
109–58, 119 Stat. 594 (2005).
Sections 150.3, 150.15, 150.15a, 150.31,
150.32 also issued under Atomic Energy Act
secs. 11e(2), 81, 83, 84 (42 U.S.C. 2014e(2),
2111, 2113, 2114).
Section 150.14 also issued under Atomic
Energy Act sec. 53 (42 U.S.C. 2073).
Section 150.15 also issued under Nuclear
Waste Policy Act secs. 135 (42 U.S.C. 10155,
10161).
Section 150.17a also issued under Atomic
Energy Act sec. 122 (42 U.S.C. 2152).
Section 150.30 also issued under Atomic
Energy Act sec. 234 (42 U.S.C. 2282).
§ 150.15
[Amended]
15. In § 150.15, remove paragraph
(a)(9).
■
Dated at Rockville, Maryland, this 23rd day
of September, 2014.
For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 2014–23257 Filed 9–29–14; 8:45 am]
BILLING CODE 7590–01–P
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 730, 732, 738, 743, 748,
752, 762, 772, and 774
[Docket No. 140613501–4501–01]
RIN 0694–AG13
Proposed Amendments to the Export
Administration Regulations: Removal
of Special Comprehensive License
Provisions
Bureau of Industry and
Security, Commerce.
ACTION: Proposed rule.
AGENCY:
In this rule, the Bureau of
Industry and Security (BIS) proposes to
continue updating export controls under
the Export Administration Regulations
(EAR) consistent with the Retrospective
Regulatory Review Initiative that directs
BIS and other Federal Government
Agencies to streamline regulations and
reduce unnecessary regulatory burdens
on the public. Specifically, in this rule,
BIS proposes to amend the EAR by
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SUMMARY:
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removing the Special Comprehensive
License authorization. This rule also
proposes conforming amendments.
DATES: Comments must be received no
later than October 30, 2014.
ADDRESSES: You may submit comments
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. The identification
number for this rulemaking is BIS–
2014–0021.
• By email directly to
publiccomments@bis.doc.gov. Include
RIN 0694–AG13 in the subject line.
• By mail or delivery to Regulatory
Policy Division, Bureau of Industry and
Security, U.S. Department of Commerce,
Room 2099B, 14th Street and
Pennsylvania Avenue NW., Washington,
DC 20230. Refer to RIN 0694–AG13.
FOR FURTHER INFORMATION CONTACT:
Thomas Andrukonis, Director, Export
Management and Compliance Division,
Office of Exporter Services, Bureau of
Industry and Security, by telephone at
(202) 482–8016 or by email at
Thomas.Andrukonis@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
Origin and Historical Advantages of the
Special Comprehensive License
The restructuring and reorganizing of
the Export Administration Regulations
(EAR) that were finalized in 1997
established provisions for the Special
Comprehensive License (SCL) in part
752 of the EAR (61 FR 12714, March 25,
1996, as amended by 62 FR 25451, May
9, 1997).
In keeping with the purpose of those
reforms, which was to ‘‘simplify, clarify
and make regulations more userfriendly,’’ the SCL made licensing more
efficient and practical by consolidating
authorizations for activities (e.g., bulk
exports and reexports of items as well
as certain other activities) and extending
periods that had been authorized under
the following special licenses: Project,
Distribution, Service Supply, Service
Facilities, Aircraft and Vessel Repair
Station Procedure, and Special
Chemical Licenses. With the
implementation of the SCL, those
special licenses were discontinued. BIS
was confident that the more flexible
SCL and a pre-approved internal control
program (ICP) would advance the
agency’s fundamental mission of
ensuring national security without
unduly burdening legitimate global
trade.
When introduced, SCLs presented
certain advantages to exporters and
consignees that could not be met by the
Validated Licenses (formerly referred to
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as Individual Validated Licenses),
which was the other licensing option at
that time. In return for committing to
enhanced administrative
responsibilities and compliance
requirements, the SCL authorized,
among other things:
• Exports and reexports of multiple
shipments of all items subject to the
EAR, with the exception of items
prohibited by statute or regulation (inter
alia, items controlled for missile
technology and short supply reasons)
and items identified as being of
significant strategic and proliferation
concern;
• Exports and reexports of multiple
shipments of items to all destinations,
except to embargoed and terrorist
supporting destinations (i.e.,
destinations in Country Groups E:1 and
E:2 in Supplement No. 1 to Part 740 of
the EAR), and countries that BIS may
designate on a case-by-case basis;
• Possible authorization by prior
approved consignees abroad of
servicing, support services, stocking
spare parts, maintenance, capital
expansion, scientific data acquisition
support, reselling and reexporting items
in the form received, and other
activities, on a case-by-case basis;
• Exports and reexports of items for a
period of four years; and
• Exports and reexports by an SCL
holder to approved consignees and
directly to the consignees’ customers,
the end-users (known as drop shipping).
In a recent review of the SCL, it
became apparent that the purposes
served by an SCL and the advantages it
provided have been overtaken by
changes to the EAR, including changes
that have occurred since the
implementation of the President’s
Export Control Reform (ECR) (See
‘‘Initial Implementation of Export
Control Reform Rule’’ (73 FR 22660,
April 16, 2013), effective October 15,
2013; ‘‘Improving Regulatory Review’’
(Executive Order 13563 of January 18,
2011); and BIS’s ‘‘Notice of Inquiry:
Retrospective Regulatory Review Under
E.O. 13563’’ (76 FR 47527, August, 5,
2011.).
At the direction of the President, in
August, 2009, BIS in conjunction with
other agencies that have export controlrelated jurisdiction began an
interagency initiative to reform the
export control system. The reform’s
objective has been to help strengthen
our national security and the
competitiveness of key U.S.
manufacturing and technology sectors
while simultaneously enabling export
control officials to better focus
government resources on transactions
that pose the most concern. Some of the
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results of this reform effort include
broadening EAR provisions so that they
are not more restrictive than similar
provisions in the International Traffic in
Arms Regulations. Such broadening
included extending the validity period
of most BIS licenses from two years to
four years, and allowing shipments to
and among approved end-users.
For purposes of the Retrospective
Regulatory Review, the President
reaffirmed the principles, structures,
and definitions that were established in
Executive Order 12866 of September 30,
1993, and which govern present-day
regulatory review. Further, the President
directed agencies to improve their
regulations by pursuing regulatory
reviews that ensure public participation,
the best regulatory tools, weighing the
benefits and costs of regulations, and
making regulations consistent, easier to
read and focused on measurable results.
BIS’s proposal to discontinue the SCL
authorization advances the objectives of
the Retrospective Regulatory Review.
Additionally, this proposed rule
addresses concerns about the utility and
unduly burdensome requirements
associated with the SCL expressed by
the exporting public in comments
submitted in response to the August 5,
2011, BIS ‘‘Notice of Inquiry,
Retrospective Regulatory Review Under
E.O. 13563.’’ One commenter
responding to that Notice of Inquiry
stated that the SCL rule is the most
rigorous and burdensome license. The
commenter claimed that the SCL rule
needs ‘‘greater regulatory clarity, less
administrative burden and greater
return on resource.’’ The commenter
went on to note that SCL holders and
consignees could get a better return on
the resources expended for the license
and on compliance efforts if more
activities were authorized, such as
manufacturing, if eligible items were
expanded and if small changes or edits
to an SCL could be made without the
need for multiple forms and without the
extensive processing time of the
interagency license review. Finally, the
commenter stated that the time and
costs associated with the management
and administrative burden of the SCL
outweigh the benefit of the license
especially when a license must be
obtained for items that are not SCL
eligible. Another commenter
recommended the ‘‘deletion’’ of the SCL
provision and stated that the provision
‘‘may no longer be practical’’ because of
the creation of License Exception STA.
BIS has issued fewer than a dozen
SCLs, and this limited number of
license holders and the low volume of
trade under SCLs are further indicators
that the present and future value of an
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SCL is outweighed by the burdens
exporters experience in applying for and
administering an SCL. Included among
these burdens are the high monetary
and resource cost incurred by the SCL
holders and their consignees related to:
—Applying for the SCL or an
amendment, which involves large
volumes of detailed documentation to
support that application or
amendment;
—Developing, administering, and
maintaining ICPs, which requires
extensive time and resources to
implement and revise; and
—Traveling and conducting internal
audits or preparing for U.S.
Government audits overseas or
domestically, which involves several
weeks per year of company staff time
to prepare for, conduct and assess, in
addition to the travel expenses
necessary to carry out the overseas
audits of consignees.
The U.S. Government also incurs high
costs in administering and enforcing the
SCL program internationally for such a
limited number of SCL holders, whose
licenses involve a low volume of trade,
which could otherwise be more
efficiently administered under the EAR.
Augmented Advantages of the EAR’s
Licenses and Other Authorizations
BIS’s implementation of the
President’s initiatives has increased the
scope of the availability, ease of
applying for, and practical and
economic usefulness of export licenses
and license exceptions under the EAR,
while facilitating better compliance by
the exporting public through expanded
outreach. The President’s initiatives
have included the following changes to
the EAR:
• A four-year export or reexport
validity period with agency
consideration of a request for an
extended validity period on a case-bycase basis;
• The option to export, reexport, or
transfer (in-country) to and among
approved end-users on a license, under
certain conditions; and
• The expansion of License Exception
Temporary imports, exports, and
reexports, and transfers (in-country)
(TMP) (Section 740.9), which now
authorizes temporary exports to a U.S.
person’s foreign subsidiary, affiliates, or
facility abroad outside of Country Group
B, and will, upon request, authorize the
retention of items abroad beyond one
year, up to a total of four years.
Also worth noting are other
potentially beneficial changes over time
under the EAR. They include:
• Easier license application-filing
procedures where exporters now have
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the ability to save and work on license
information that they then can submit to
BIS via the Simplified Network
Application Process—Redesign System,
or SNAP–R;
• Shorter license application
processing times, typically without prelicense consultations, ICP requirements,
or post-license system reviews;
• No requirement for reports for all
items exported or reexported;
• Licenses that could include items
controlled for Missile Technology, Short
Supply and other reasons excluded from
the SCL; and
• No expiration for an authorization
allowing U.S., foreign, affiliated or
unaffiliated parties to export and
reexport approved items to approved
validated end-users (VEUs).
These streamlined, more flexible and
varied authorizations are available, as
appropriate, to facilitate more efficient
and practical means of exporting,
reexporting and transferring (in-country)
items subject to export controls under
the EAR without the burdens imposed
by an SCL. More importantly, the
amendments proposed in this rule
eventually will lead to more efficient
administration and enforcement of
export controls under the EAR.
Description of Proposed Changes
Primary Provisions for the SCL: Part
752—Special Comprehensive License
BIS proposes to discontinue the SCL
authorization, and therefore remove the
text of the SCL provisions located at
part 752 (Sections 752.1 through 752.17
and Supplements No. 1 through No. 5
to part 752) of the EAR. In addition, BIS
proposes to reserve part 752.
Conforming Amendments
BIS also proposes conforming
amendments that would remove
references to the SCL authorization in
other parts of the EAR. The SCL-related
provisions that BIS proposes to remove
from the EAR are set out according to
part number as follows:
Part 730—General Information
• The reference to the SCL in the
second sentence of paragraph (a)(5) of
section 730.8 (How to proceed and
where to get help); and
• In Supplement No. 1 to Part 730—
Information Collection Requirements
Under the Paperwork Reduction Act:
OMB Control Numbers:
• References to the SCL in control
numbers 0694–0088 (Simplified
Network Application Processing +
System (SNAP+) and the Multipurpose
Export License Application) and 0607–
0152 (Automated Export System (AES)
Program); and
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Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Proposed Rules
• The collection of information
authorized under control number 0694–
0089 (Special Comprehensive License
Procedure).
Part 732—Steps for Using the EAR
• The reference to the SCL with
regard to Destination Control Statements
in paragraph (b) of section 732.5 (Steps
regarding shipper’s export declaration
or automated export system record,
Destination Control Statements, And
Recordkeeping); and
• The specific obligations imposed on
parties to an SCL that appear in
paragraph (d) of section 732.6 (Steps for
other requirements).
Part 738—Commerce Control List
Overview and the Country Chart
• References to the SCL in paragraph
(b)(3) of section 738.4 (Determining
whether a license is required), which
provides a sample CCL entry for
determining whether a license is
required.
Part 743—Special Reporting and
Notification
• The reporting requirement for
exports of certain commodities,
software, and technology controlled
under the Wassenaar Arrangement
when the items are authorized under the
SCL procedure from paragraph (b)(2) of
section 743.1 (Wassenaar Arrangement);
and
• The reporting requirement for
exports of certain items listed on the
Wassenaar Arrangement Munitions List
and the UN Register of Conventional
Arms when those items are authorized
under the SCL procedure from
paragraph (b)(2) of section 743.4
(Conventional arms reporting).
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Part 748—Applications (Classification,
Advisory, and License) and
Documentation
References and provisions related to
the SCL in the following paragraphs:
• Paragraph (d), introductory text, of
section 748.1 (General provisions),
which provides that SCL export and
reexport license applications are
exempted from electronic filing
requirements;
• Paragraph (h) of section 748.4
(Basic guidance related to applying for
a license), which provides that
emergency processing is not available
for SCL applications;
• Paragraphs (a) (Scope) and (d) (Role
of individual users) of section 748.7
(Registering for electronic submission of
license application and related
documents);
• Paragraph (a)(6) of section 748.9
(Support documents for license
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applications), which provides that SCL
applications are exempted from the
support documents requirement;
• Paragraph (a)(1)(iii) of section
748.12 (Special provisions for support
documents), which provides that an
item removed from SCL eligibility
would have a grace period of 45 days for
complying with support documents
requirements for a license application
for the item; and
• The reference to SCL as a type of
application in ‘‘Block 5,’’ the entire
‘‘Block 8’’of ‘‘Supplement No. 1 to Part
748–BIS–748P, BIS–748P–A; Items
Appendix; and BIS–748P–B; End-User
Appendix; Multipurpose Application
Instructions’’.
Part 762—Recordkeeping
References and provisions related to
the SCL in the following paragraphs:
• Paragraphs (b)(31) ‘‘§ 752.7, Direct
shipment to customers,’’ (b)(32)
‘‘§ 752.9, Action on SCL applications,’’
(b)(33) ‘‘§ 752.10, Changes to the SCL,’’
(b)(34) ‘‘§ 752.11, Internal Control
Programs,’’ (b)(35) ‘‘§ 752.12,
Recordkeeping requirements,’’ (b)(36)
‘‘§ 752.13, Inspection of records,’’ (b)(37)
‘‘§ 752.14, System reviews,’’ and (b)(38)
‘‘§ 752.15, Export clearance’’ of section
762.2 (Records to be retained).
Part 772—Definitions of Terms
• The definition of ‘‘Controlled in
Fact’’ from section 772.1 (Definitions of
terms as used in the Export
Administration Regulations (EAR).
Part 774—The Commerce Control List
• Reference to the SCL in the
‘‘REPORTING REQUIREMENTS’’
section of all applicable ECCNs.
Transition Guidance
BIS proposes that all SCLs would
expire one year from the date of
publication of a final rule that removes
SCL provisions from the EAR, or the
expiration date of the SCL under the
particular terms of the license,
whichever is earlier. During that
transition period, which could be up to
one year after the publication of the
final rule, BIS will not accept
amendments, including renewals, to
outstanding SCLs. After the publication
of the final rule, SCL holders may
choose to apply for four-year individual
licenses for exporting and reexporting
items under the EAR or use available
license exceptions. Finally, as with all
transactions subject to the EAR, the
applicable recordkeeping requirements
under 15 CFR part 762 will continue to
apply to SCL transactions until the
applicable retention requirements are
fulfilled.
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Request for Comments
BIS seeks comments on this proposed
rule. BIS will consider all comments
received on or before October 30, 2014.
All comments (including any personally
identifying information or information
for which a claim of confidentially is
asserted either in those comments or
their transmittal emails) will be made
available for public inspection and
copying. Parties who wish to comment
anonymously may do so by submitting
their comments via Regulations.gov,
leaving the fields that would identify
the commenter blank and including no
identifying information in the comment
itself. See methods for submitting
comments in the ADDRESSES section of
this rule.
Export Administration Act
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., 783 (2002), as amended by
Executive Order 13637 of March 8,
2013, 78 FR 16129 (March 13, 2013),
and extended most recently by the
Notice of August 7, 2014, 79 FR 46959
(August 11, 2014), 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 as amended by Executive Order
13637.
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,
reducing costs, harmonizing rules, and
promoting flexibility. This rule has been
determined to be a significant regulatory
action, although not economically
significant, under section 3(f) of
Executive Order 12866 for purposes of
Executive Order 12866. Accordingly,
the rule has been reviewed by the Office
of Management and Budget (OMB).
2. This rule amends collections
previously approved by the Office of
Management and Budget (OMB) under
Control Numbers 0694–0088,
‘‘Simplified Network Application
Processing + System (SNAP+) and the
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Multi-Purpose Application,’’ which
carries a burden hour estimate of 43.8
minutes to prepare and submit form
BIS–748; 0694–0089, ‘‘Special
Comprehensive License,’’ which carries
a burden hour estimate of 40 hours to
complete an application, 30 minutes to
complete annual extension requests, 4
hours to complete amendments, and six
hours to perform recordkeeping and
internal control program annual
certifications; and 0694–0152,
‘‘Automated Export System (AES)
Program,’’ which carries a burden hour
estimate of three minutes or 0.05 hours
per electronic submission. This
requirement has been submitted to OMB
for approval.
The total burden hours associated
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3501 et seq.) (PRA) and
the aforementioned OMB Control
Numbers would be expected to decrease
as a result of this proposed removal of
part 752 of the EAR and related
provisions this rule if the rule is
eventually issued in final form, thereby
reducing burden hours associated with
approved collections related to the EAR.
Public comment is sought regarding:
Whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
the accuracy of the burden estimate;
ways to enhance the quality, utility, and
clarity of the information to be
collected; and ways to minimize the
burden of the collection of information,
including through the use of automated
collection techniques or other forms of
information technology. Send comments
on these or any other aspects of the
collection of information to Regulatory
Policy Division, Bureau of Industry and
Security, U.S. Department of Commerce
at the ADDRESSES above, and email to
OMB at OIRA_Submission@
omb.eop.gov, or fax to (202) 395–7285.
Notwithstanding any other provision
of the 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 PRA, unless
that collection of information displays a
currently valid OMB Control Number.
3. This rule does not contain policies
with Federalism implications as that
term is defined under Executive Order
13132.
4. Regulatory Flexibility Act of 1980
(5 U.S.C. 601 et seq.). 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,
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would not have a significant economic
impact on a substantial number of small
entities.
Economic Impact. BIS believes this
rule will reduce the economic impact on
impacted entities because although this
rule would eliminate the availability of
the SCL, such entities could still obtain
individual validated licenses from BIS
to export their product. In fact, the other
licenses available are less burdensome
and require fewer compliance/reporting
measures than those associated with
SCL. It would be an overall reduction in
burden for an SCL holder to transition
to one of the other available licenses
authorized under the EAR. For example,
under the SCL, a license holder was
required to implement a specific
internal control program (ICP). Under a
license established under the ECR, the
impacted entities would be measured by
their ultimate compliance with the EAR.
Also with a license established under
the ECR, SCL holders can transition to
a four-year license through the validated
license process. In addition, they have
the availability of license exception
Strategic Trade Authorization (STA),
which allows shipments of higher-end
controlled items than allowed under the
SCL, when conditions are met. Also,
impacted entities would have the
convenience of applying for a license
via the Simplified Network Application
Process-Redesign (SNAP–R) System, an
updated system for electronically filing
export and reexport license
applications.
Number of Small Entities. The types
entities that would be directly impacted
by this action include manufactures, oil
and gas exploration and production
companies, and exporters and
reexporters of various equipment. Based
on a review of current Special
Comprehensive License (SCL) holders,
there are less than a dozen entities that
have outstanding licenses for items on
the CCL. Due to the nature of the SCL,
BIS expects that most of the current
license holders would be considered
large entities under the Small Business
Administration’s size standards.
However, BIS does not collect data on
the size or annual revenue of these
entities, and thus some of these entities
may be considered small under the SBA
size standards. Also, although small
entities are not the primary users of the
SCL, BIS acknowledges that small
entities may have been parties to SCL
transactions. To assist in the evaluation
of a significant economic impact of this
rule on a substantial number of small
entities, BIS welcomes comments to
explain how and to what extent your
business or organization could be
affected, if your business or organization
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is a small entity and if adoption of any
of the amendments discussed in this
proposed rulemaking could have a
significant financial impact on your
operations.
List of Subjects
15 CFR Part 730
Administrative practice and
procedure, Advisory committees,
Exports, Reporting and recordkeeping
requirements, Strategic and critical
materials.
15 CFR Parts 732, 748, and 752
Administrative practice and
procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Parts 738 and 772
Exports.
15 CFR Part 743
Administrative practice and
procedure, Reporting and recordkeeping
requirements.
15 CFR 762
Administrative practice and
procedure, Business and industry,
Confidential business information,
Exports, Reporting and recordkeeping
requirements.
15 CFR 774
Exports, Reporting and recordkeeping
requirements.
Accordingly, under the authority of
50 U.S.C. 1701 et seq., parts 730, 732,
738, 743, 748, 752, 762, 772 and 774 of
the Export Administration Regulations
(15 CFR parts 730–774) are proposed to
be amended as follows:
PART 730—[AMENDED]
1. The authority citation for part 730
continues to read as follows:
■
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note;
22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30
U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a;
50 U.S.C. app. 5; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; E.O. 11912, 41 FR 15825, 3 CFR,
1976 Comp., p. 114; E.O. 12002, 42 FR 35623,
3 CFR, 1977 Comp., p. 133; E.O. 12058, 43
FR 20947, 3 CFR, 1978 Comp., p. 179; E.O.
12214, 45 FR 29783, 3 CFR, 1980 Comp., p.
256; E.O. 12851, 58 FR 33181, 3 CFR, 1993
Comp., p. 608; E.O. 12854, 58 FR 36587, 3
CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR
28205, 3 CFR, 1994 Comp., p. 899; E.O.
12938, 59 FR 59099, 3 CFR, 1994 Comp., p.
950; E.O. 12947, 60 FR 5079, 3 CFR, 1995
Comp., p. 356; E.O. 12981, 60 FR 62981, 3
CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR
54079, 3 CFR, 1996 Comp., p. 219; E.O.
13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998
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Comp., p. 208; E.O. 13222, 66 FR 44025, 3
CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR
49079, 3 CFR, 2001 Comp., p. 786; E.O.
13338, 69 FR 26751, 3 CFR, 2004 Comp., p
168; E.O. 13637 of March 8, 2013, 78 FR
16129 (March 13, 2013); Notice of September
18, 2013, 78 FR 58151 (September 20, 2013);
Notice of November 7, 2013, 78 FR 67289
(November 12, 2013); Notice of January 21,
2014, 79 FR 3721 (January 22, 2014); Notice
of May 7, 2014, 79 FR 26589 (May 9, 2014);
Notice of August 7, 2014, 79 FR 46959
(August 11, 2014).
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 7, 2014, 79
FR 46959 (August 11, 2014).
§ 730.8
■
[Amended]
Supplement No. 1 to Part 730
[Amended]
3. Supplement No. 1 to Part 730 is
amended by:
■ a. Revising the entry in the ‘‘Reference
in the EAR’’ Column for ‘‘Collection
number’’ ‘‘0694–0088’’ to read ‘‘parts
746 and 748; § 762.2(b).’’;
■ b. Removing the entire entry for
‘‘Collection number’’ ‘‘0694–0089’’; and
■ c. Removing the citations to
‘‘752.7(b)’’ and ‘‘752.15(a)’’ from the
‘‘Reference in the EAR’’ Column for
‘‘Collection number’’ ‘‘0607–0152’’.
■
4. The authority citation for part 732
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 7, 2014, 79 FR 46959 (August 11,
2014).
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; E.O. 13637 of
March 8, 2013, 78 FR 16129 (March 13,
2013); 78 FR 16129 ; Notice of August 7,
2014, 79 FR 46959 (August 11, 2014).
§ 743.1
10. Section 743.1 is amended by
removing and reserving paragraph
(b)(2).
■
§ 743.4
[Amended]
11. Section 743. 4 is amended by
removing and reserving paragraph
(b)(2).
■
PART 748—[AMENDED]
§ 732.5 Steps Regarding Shipper’s Export
Declaration or Automated Export System
Record, Destination Control Statements,
And Recordkeeping.
*
*
*
*
*
(b) Step 28: Destination Control
Statement * * * DCS requirements do
not apply to reexports * * *
*
*
*
*
*
[Amended]
6. Section 732.6 is amended by
removing and reserving paragraph (d).
■
PART 738—[AMENDED]
§ 748.7
[Amended]
15. Section 748.7 is amended by
removing the phrase ‘‘Special
Comprehensive License and’’ from the
parenthetical in the second sentence in
paragraph (a) and from the parenthetical
in the first sentence in paragraph (d).
■
[Amended]
16. Section 748.9 is amended by
removing and reserving paragraph (a)(6).
■
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
7430(e); 22 U.S.C. 287c; 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u);
42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C.
1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
§ 748.12
[Amended]
17. Section 748.12 is amended by:
a. Removing the semicolon and the
word ‘‘or’’ at the end of paragraph
(a)(1)(ii)
■
■
PO 00000
PART 752—[REMOVED AND
RESERVED]
■
19. Remove and reserve part 752.
20. The authority citation for part 762
continues 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
7, 2014, 79 FR 46959 (August 11, 2014).
§ 762.2
[Amended]
21. Section 762.2 is amended by
removing and reserving paragraphs
(b)(31) through (38).
PART 772—[AMENDED]
22. The authority citation for part 772
continues 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
7, 2014, 79 FR 46959 (August 11, 2014).
§ 772.1
[Amended]
23. Section 772.1 is amended by
removing the definition ‘‘Controlled In
Fact.’’
■
[Amended]
14. Section 748.4 is amended by
removing the next to last sentence in
paragraph (h).
■
§ 748.9
7. The authority citation for 15 CFR
part 738 continues to read as follows:
■
Jkt 232001
[Amended]
13. Section 748.1 is amended by
removing the phrase ‘‘Special
Comprehensive License or’’ from the
parenthetical in the first sentence in
paragraph (d), introductory text.
§ 748.4
18. Supplement No. 1 to Part 748 is
amended by:
■ a. Removing the next to last sentence
and the caption, ‘‘Special
Comprehensive License’’ that precedes
it in paragraph ‘‘Block 5:’’ and
■ b. Removing and reserving paragraph
‘‘Block 8’’.
■
■
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 7, 2014, 79 FR 46959 (August 11,
2014).
§ 748.1
Supplement No. 1 to Part 748
[Amended]
PART 762—[AMENDED]
[Amended]
■
5. Section 732.5 is amended by
revising the next to last sentence of
paragraph (b) to read as follows:
■
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PART 743—[AMENDED]
12. The authority citation for part 748
continues to read as follows:
■
17:11 Sep 29, 2014
8. Section 738.4 is amended by
removing the phrase ‘‘or Special
Comprehensive License’’ at the end of
the sixth sentence in paragraph (b)(3).
■
■
PART 732—[AMENDED]
VerDate Sep<11>2014
[Amended]
9. The authority citation for part 743
continues to read as follows:
2. Section 730.8 is amended by
removing the next to last sentence in
paragraph (a)(5).
■
§ 732.6
§ 738.4
b. Adding a period at the end of
paragraph (a)(1)(ii); and
■ c. Removing paragraph (a)(1)(iii).
■
Frm 00008
Fmt 4702
Sfmt 4702
PART 774—[AMENDED]
24. The authority citation for part 774
continues to read as follows:
■
Authority: 50 U.S.C. app. 2401 et seq.; 50
U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.
7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u);
42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C.
1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 7, 2014, 79
FR 46959 (August 11, 2014).
Supplement No. 1 to Part 774
[Amended]
25. Supplement No. 1 to part 774 (the
Commerce Control List) is amended by
removing the phrase ‘‘Special
■
E:\FR\FM\30SEP1.SGM
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Federal Register / Vol. 79, No. 189 / Tuesday, September 30, 2014 / Proposed Rules
Comprehensive Licenses,’’ wherever it
is found.
Kevin J. Wolf,
Assistant Secretary for Export
Administration.
[FR Doc. 2014–23078 Filed 9–29–14; 8:45 am]
BILLING CODE 3510–33–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 40
[Docket No. RM14–13–000]
Communications Reliability Standards
Federal Energy Regulatory
Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Commission proposes to
approve Communications Reliability
Standard COM–001–2 and Operating
Personnel Communications Protocols
Reliability Standard COM–002–4,
developed by the North American
Electric Reliability Corporation (NERC),
which the Commission has certified as
the Electric Reliability Organization
responsible for developing and
enforcing mandatory Reliability
Standards. The Commission believes
that the proposed Reliability Standards
will enhance reliability over the
currently-effective COM standards in
several respects by, among other things,
requiring adoption of predefined
communication protocols, annual
assessment of those protocols and
operating personnel’s adherence thereto,
training on the protocols, and use of
three-part communications. However,
the Commission proposes to direct
NERC to modify proposed Reliability
Standard COM–001–2 to include
internal communications capabilities.
DATES: Comments are due December 1,
2014.
ADDRESSES: Comments, identified by
docket number, may be filed in the
following ways:
• Electronic Filing through https://
www.ferc.gov. Documents created
electronically using word processing
software should be filed in native
applications or print-to-PDF format and
not in a scanned format.
• Mail/Hand Delivery: Those unable
to file electronically may mail or handdeliver comments to: Federal Energy
Regulatory Commission, Secretary of the
Commission, 888 First Street NE.,
Washington, DC 20426.
Instructions: For detailed instructions
on submitting comments and additional
mstockstill on DSK4VPTVN1PROD with PROPOSALS
SUMMARY:
VerDate Sep<11>2014
17:11 Sep 29, 2014
Jkt 232001
information on the rulemaking process,
see the Comment Procedures Section of
this document.
FOR FURTHER INFORMATION CONTACT:
Vincent Le (Technical Information),
Office of Electric Reliability, Federal
Energy Regulatory Commission, 888
First Street NE., Washington, DC
20426, (202) 502–6204, Vincent.le@
ferc.gov.
Michael Gandolfo (Technical
Information), Office of Electric
Reliability, Federal Energy Regulatory
Commission, 888 First Street NE.,
Washington, DC 20426, (202) 502–
6817, Michael.gandolfo@ferc.gov.
Julie Greenisen (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE., Washington, DC
20426, (202) 502–6362,
julie.greenisen@ferc.gov.
Robert T. Stroh (Legal Information),
Office of the General Counsel, Federal
Energy Regulatory Commission, 888
First Street NE., Washington, DC
20426, Telephone: (202) 502–8473,
Robert.Stroh@ferc.gov.
SUPPLEMENTARY INFORMATION:
1. Pursuant to section 215 of the
Federal Power Act (FPA),1 the
Commission proposes to approve two
Reliability Standards, COM–001–2
(Communications) and COM–002–4
(Operating Personnel Communications
Protocols), developed by the North
American Electric Reliability
Corporation (NERC), which the
Commission has certified as the Electric
Reliability Organization responsible for
developing and enforcing mandatory
Reliability Standards. In addition, the
Commission proposes to approve three
new terms to be added to the NERC
Glossary of Terms, and the violation risk
factors, violation severity levels, and
proposed implementation plan for both
revised standards.
2. Proposed Reliability Standard
COM–001–2 is intended to establish a
clear set of requirements for the
communications capabilities that
applicable functional entities must have
in place and maintain. Proposed
Reliability Standard COM–002–4
requires applicable entities to develop
communication protocols with certain
minimum requirements, including use
of three-part communication when
issuing Operating Instructions.2
1 16
U.S.C. 824o (2012).
proposes to define Operating Instruction
as ‘‘[a] command by operating personnel
responsible for the Real-time operation of the
interconnected Bulk Electric System to change or
preserve the state, status, output, or input of an
Element of the Bulk Electric System or Facility of
the Bulk Electric System. (A discussion of general
2 NERC
PO 00000
Frm 00009
Fmt 4702
Sfmt 4702
58709
Proposed Reliability Standard COM–
002–4 also sets out certain
communications training requirements
for all issuers and recipients of
Operating Instructions, and establishes a
flexible enforcement approach for
failure to use three-part communication
during non-emergencies and a ‘‘zerotolerance’’ enforcement approach for
failure to use three-part
communications during an emergency.
3. The Commission believes that the
proposed Reliability Standards will
enhance reliability over the currentlyeffective COM standards in several
respects. For example, the proposed
Reliability Standards expand
applicability to include generator
operators and distribution providers and
eliminate certain ambiguities in the
currently-effective standard. Thus, the
Commission proposes to approve the
modified COM standards. However, the
Commission seeks additional
information and explanation on
responsibility for use of three-part
communication by transmission owners
and generation owners that receive
Operating Instructions. In addition, the
Commission proposes to direct NERC to
modify proposed Reliability Standard
COM–001–2 to include internal
communication capabilities, and seeks
additional information on the lack of a
testing requirement for distribution
providers and generator operators in
COM–001–2 and on the intended
meaning and use of the proposed terms
Interpersonal Communication and
Alternative Interpersonal
Communication.
I. Background
A. Regulatory Background
4. Section 215 of the FPA requires a
Commission-certified Electric
Reliability Organization (ERO) to
develop mandatory and enforceable
Reliability Standards, subject to
Commission review and approval.3
Once approved, the Reliability
Standards may be enforced by the ERO
subject to Commission oversight, or by
the Commission independently.4 In
2006, the Commission certified NERC as
the ERO pursuant to FPA section 215.5
5. The Commission approved
Reliability Standard COM–001–1 in
information and of potential options or alternatives
. . . is not considered an Operating Instruction.)’’
3 16 U.S.C. 824o(c) and (d).
4 See id. 824o(e).
5 North American Electric Reliability Corp., 116
FERC ¶ 61,062, order on reh’g & compliance, 117
FERC ¶ 61,126 (2006), aff’d sub nom. Alcoa, Inc.
v. FERC, 564 F.3d 1342 (D.C. Cir. 2009).
E:\FR\FM\30SEP1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 189 (Tuesday, September 30, 2014)]
[Proposed Rules]
[Pages 58704-58709]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23078]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 730, 732, 738, 743, 748, 752, 762, 772, and 774
[Docket No. 140613501-4501-01]
RIN 0694-AG13
Proposed Amendments to the Export Administration Regulations:
Removal of Special Comprehensive License Provisions
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this rule, the Bureau of Industry and Security (BIS)
proposes to continue updating export controls under the Export
Administration Regulations (EAR) consistent with the Retrospective
Regulatory Review Initiative that directs BIS and other Federal
Government Agencies to streamline regulations and reduce unnecessary
regulatory burdens on the public. Specifically, in this rule, BIS
proposes to amend the EAR by removing the Special Comprehensive License
authorization. This rule also proposes conforming amendments.
DATES: Comments must be received no later than October 30, 2014.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
The identification number for this rulemaking is BIS-2014-0021.
By email directly to publiccomments@bis.doc.gov. Include
RIN 0694-AG13 in the subject line.
By mail or delivery to Regulatory Policy Division, Bureau
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN
0694-AG13.
FOR FURTHER INFORMATION CONTACT: Thomas Andrukonis, Director, Export
Management and Compliance Division, Office of Exporter Services, Bureau
of Industry and Security, by telephone at (202) 482-8016 or by email at
Thomas.Andrukonis@bis.doc.gov.
SUPPLEMENTARY INFORMATION:
Background
Origin and Historical Advantages of the Special Comprehensive License
The restructuring and reorganizing of the Export Administration
Regulations (EAR) that were finalized in 1997 established provisions
for the Special Comprehensive License (SCL) in part 752 of the EAR (61
FR 12714, March 25, 1996, as amended by 62 FR 25451, May 9, 1997).
In keeping with the purpose of those reforms, which was to
``simplify, clarify and make regulations more user-friendly,'' the SCL
made licensing more efficient and practical by consolidating
authorizations for activities (e.g., bulk exports and reexports of
items as well as certain other activities) and extending periods that
had been authorized under the following special licenses: Project,
Distribution, Service Supply, Service Facilities, Aircraft and Vessel
Repair Station Procedure, and Special Chemical Licenses. With the
implementation of the SCL, those special licenses were discontinued.
BIS was confident that the more flexible SCL and a pre-approved
internal control program (ICP) would advance the agency's fundamental
mission of ensuring national security without unduly burdening
legitimate global trade.
When introduced, SCLs presented certain advantages to exporters and
consignees that could not be met by the Validated Licenses (formerly
referred to as Individual Validated Licenses), which was the other
licensing option at that time. In return for committing to enhanced
administrative responsibilities and compliance requirements, the SCL
authorized, among other things:
Exports and reexports of multiple shipments of all items
subject to the EAR, with the exception of items prohibited by statute
or regulation (inter alia, items controlled for missile technology and
short supply reasons) and items identified as being of significant
strategic and proliferation concern;
Exports and reexports of multiple shipments of items to
all destinations, except to embargoed and terrorist supporting
destinations (i.e., destinations in Country Groups E:1 and E:2 in
Supplement No. 1 to Part 740 of the EAR), and countries that BIS may
designate on a case-by-case basis;
Possible authorization by prior approved consignees abroad
of servicing, support services, stocking spare parts, maintenance,
capital expansion, scientific data acquisition support, reselling and
reexporting items in the form received, and other activities, on a
case-by-case basis;
Exports and reexports of items for a period of four years;
and
Exports and reexports by an SCL holder to approved
consignees and directly to the consignees' customers, the end-users
(known as drop shipping).
In a recent review of the SCL, it became apparent that the purposes
served by an SCL and the advantages it provided have been overtaken by
changes to the EAR, including changes that have occurred since the
implementation of the President's Export Control Reform (ECR) (See
``Initial Implementation of Export Control Reform Rule'' (73 FR 22660,
April 16, 2013), effective October 15, 2013; ``Improving Regulatory
Review'' (Executive Order 13563 of January 18, 2011); and BIS's
``Notice of Inquiry: Retrospective Regulatory Review Under E.O. 13563''
(76 FR 47527, August, 5, 2011.).
At the direction of the President, in August, 2009, BIS in
conjunction with other agencies that have export control-related
jurisdiction began an interagency initiative to reform the export
control system. The reform's objective has been to help strengthen our
national security and the competitiveness of key U.S. manufacturing and
technology sectors while simultaneously enabling export control
officials to better focus government resources on transactions that
pose the most concern. Some of the
[[Page 58705]]
results of this reform effort include broadening EAR provisions so that
they are not more restrictive than similar provisions in the
International Traffic in Arms Regulations. Such broadening included
extending the validity period of most BIS licenses from two years to
four years, and allowing shipments to and among approved end-users.
For purposes of the Retrospective Regulatory Review, the President
reaffirmed the principles, structures, and definitions that were
established in Executive Order 12866 of September 30, 1993, and which
govern present-day regulatory review. Further, the President directed
agencies to improve their regulations by pursuing regulatory reviews
that ensure public participation, the best regulatory tools, weighing
the benefits and costs of regulations, and making regulations
consistent, easier to read and focused on measurable results.
BIS's proposal to discontinue the SCL authorization advances the
objectives of the Retrospective Regulatory Review. Additionally, this
proposed rule addresses concerns about the utility and unduly
burdensome requirements associated with the SCL expressed by the
exporting public in comments submitted in response to the August 5,
2011, BIS ``Notice of Inquiry, Retrospective Regulatory Review Under
E.O. 13563.'' One commenter responding to that Notice of Inquiry stated
that the SCL rule is the most rigorous and burdensome license. The
commenter claimed that the SCL rule needs ``greater regulatory clarity,
less administrative burden and greater return on resource.'' The
commenter went on to note that SCL holders and consignees could get a
better return on the resources expended for the license and on
compliance efforts if more activities were authorized, such as
manufacturing, if eligible items were expanded and if small changes or
edits to an SCL could be made without the need for multiple forms and
without the extensive processing time of the interagency license
review. Finally, the commenter stated that the time and costs
associated with the management and administrative burden of the SCL
outweigh the benefit of the license especially when a license must be
obtained for items that are not SCL eligible. Another commenter
recommended the ``deletion'' of the SCL provision and stated that the
provision ``may no longer be practical'' because of the creation of
License Exception STA.
BIS has issued fewer than a dozen SCLs, and this limited number of
license holders and the low volume of trade under SCLs are further
indicators that the present and future value of an SCL is outweighed by
the burdens exporters experience in applying for and administering an
SCL. Included among these burdens are the high monetary and resource
cost incurred by the SCL holders and their consignees related to:
--Applying for the SCL or an amendment, which involves large volumes of
detailed documentation to support that application or amendment;
--Developing, administering, and maintaining ICPs, which requires
extensive time and resources to implement and revise; and
--Traveling and conducting internal audits or preparing for U.S.
Government audits overseas or domestically, which involves several
weeks per year of company staff time to prepare for, conduct and
assess, in addition to the travel expenses necessary to carry out the
overseas audits of consignees.
The U.S. Government also incurs high costs in administering and
enforcing the SCL program internationally for such a limited number of
SCL holders, whose licenses involve a low volume of trade, which could
otherwise be more efficiently administered under the EAR.
Augmented Advantages of the EAR's Licenses and Other Authorizations
BIS's implementation of the President's initiatives has increased
the scope of the availability, ease of applying for, and practical and
economic usefulness of export licenses and license exceptions under the
EAR, while facilitating better compliance by the exporting public
through expanded outreach. The President's initiatives have included
the following changes to the EAR:
A four-year export or reexport validity period with agency
consideration of a request for an extended validity period on a case-
by-case basis;
The option to export, reexport, or transfer (in-country)
to and among approved end-users on a license, under certain conditions;
and
The expansion of License Exception Temporary imports,
exports, and reexports, and transfers (in-country) (TMP) (Section
740.9), which now authorizes temporary exports to a U.S. person's
foreign subsidiary, affiliates, or facility abroad outside of Country
Group B, and will, upon request, authorize the retention of items
abroad beyond one year, up to a total of four years.
Also worth noting are other potentially beneficial changes over
time under the EAR. They include:
Easier license application-filing procedures where
exporters now have the ability to save and work on license information
that they then can submit to BIS via the Simplified Network Application
Process--Redesign System, or SNAP-R;
Shorter license application processing times, typically
without pre-license consultations, ICP requirements, or post-license
system reviews;
No requirement for reports for all items exported or
reexported;
Licenses that could include items controlled for Missile
Technology, Short Supply and other reasons excluded from the SCL; and
No expiration for an authorization allowing U.S., foreign,
affiliated or unaffiliated parties to export and reexport approved
items to approved validated end-users (VEUs).
These streamlined, more flexible and varied authorizations are
available, as appropriate, to facilitate more efficient and practical
means of exporting, reexporting and transferring (in-country) items
subject to export controls under the EAR without the burdens imposed by
an SCL. More importantly, the amendments proposed in this rule
eventually will lead to more efficient administration and enforcement
of export controls under the EAR.
Description of Proposed Changes
Primary Provisions for the SCL: Part 752--Special Comprehensive License
BIS proposes to discontinue the SCL authorization, and therefore
remove the text of the SCL provisions located at part 752 (Sections
752.1 through 752.17 and Supplements No. 1 through No. 5 to part 752)
of the EAR. In addition, BIS proposes to reserve part 752.
Conforming Amendments
BIS also proposes conforming amendments that would remove
references to the SCL authorization in other parts of the EAR. The SCL-
related provisions that BIS proposes to remove from the EAR are set out
according to part number as follows:
Part 730--General Information
The reference to the SCL in the second sentence of
paragraph (a)(5) of section 730.8 (How to proceed and where to get
help); and
In Supplement No. 1 to Part 730--Information Collection
Requirements Under the Paperwork Reduction Act: OMB Control Numbers:
References to the SCL in control numbers 0694-0088
(Simplified Network Application Processing + System (SNAP+) and the
Multipurpose Export License Application) and 0607-0152 (Automated
Export System (AES) Program); and
[[Page 58706]]
The collection of information authorized under control
number 0694-0089 (Special Comprehensive License Procedure).
Part 732--Steps for Using the EAR
The reference to the SCL with regard to Destination
Control Statements in paragraph (b) of section 732.5 (Steps regarding
shipper's export declaration or automated export system record,
Destination Control Statements, And Recordkeeping); and
The specific obligations imposed on parties to an SCL that
appear in paragraph (d) of section 732.6 (Steps for other
requirements).
Part 738--Commerce Control List Overview and the Country Chart
References to the SCL in paragraph (b)(3) of section 738.4
(Determining whether a license is required), which provides a sample
CCL entry for determining whether a license is required.
Part 743--Special Reporting and Notification
The reporting requirement for exports of certain
commodities, software, and technology controlled under the Wassenaar
Arrangement when the items are authorized under the SCL procedure from
paragraph (b)(2) of section 743.1 (Wassenaar Arrangement); and
The reporting requirement for exports of certain items
listed on the Wassenaar Arrangement Munitions List and the UN Register
of Conventional Arms when those items are authorized under the SCL
procedure from paragraph (b)(2) of section 743.4 (Conventional arms
reporting).
Part 748--Applications (Classification, Advisory, and License) and
Documentation
References and provisions related to the SCL in the following
paragraphs:
Paragraph (d), introductory text, of section 748.1
(General provisions), which provides that SCL export and reexport
license applications are exempted from electronic filing requirements;
Paragraph (h) of section 748.4 (Basic guidance related to
applying for a license), which provides that emergency processing is
not available for SCL applications;
Paragraphs (a) (Scope) and (d) (Role of individual users)
of section 748.7 (Registering for electronic submission of license
application and related documents);
Paragraph (a)(6) of section 748.9 (Support documents for
license applications), which provides that SCL applications are
exempted from the support documents requirement;
Paragraph (a)(1)(iii) of section 748.12 (Special
provisions for support documents), which provides that an item removed
from SCL eligibility would have a grace period of 45 days for complying
with support documents requirements for a license application for the
item; and
The reference to SCL as a type of application in ``Block
5,'' the entire ``Block 8''of ``Supplement No. 1 to Part 748-BIS-748P,
BIS-748P-A; Items Appendix; and BIS-748P-B; End-User Appendix;
Multipurpose Application Instructions''.
Part 762--Recordkeeping
References and provisions related to the SCL in the following
paragraphs:
Paragraphs (b)(31) ``Sec. 752.7, Direct shipment to
customers,'' (b)(32) ``Sec. 752.9, Action on SCL applications,''
(b)(33) ``Sec. 752.10, Changes to the SCL,'' (b)(34) ``Sec. 752.11,
Internal Control Programs,'' (b)(35) ``Sec. 752.12, Recordkeeping
requirements,'' (b)(36) ``Sec. 752.13, Inspection of records,''
(b)(37) ``Sec. 752.14, System reviews,'' and (b)(38) ``Sec. 752.15,
Export clearance'' of section 762.2 (Records to be retained).
Part 772--Definitions of Terms
The definition of ``Controlled in Fact'' from section
772.1 (Definitions of terms as used in the Export Administration
Regulations (EAR).
Part 774--The Commerce Control List
Reference to the SCL in the ``REPORTING REQUIREMENTS''
section of all applicable ECCNs.
Transition Guidance
BIS proposes that all SCLs would expire one year from the date of
publication of a final rule that removes SCL provisions from the EAR,
or the expiration date of the SCL under the particular terms of the
license, whichever is earlier. During that transition period, which
could be up to one year after the publication of the final rule, BIS
will not accept amendments, including renewals, to outstanding SCLs.
After the publication of the final rule, SCL holders may choose to
apply for four-year individual licenses for exporting and reexporting
items under the EAR or use available license exceptions. Finally, as
with all transactions subject to the EAR, the applicable recordkeeping
requirements under 15 CFR part 762 will continue to apply to SCL
transactions until the applicable retention requirements are fulfilled.
Request for Comments
BIS seeks comments on this proposed rule. BIS will consider all
comments received on or before October 30, 2014. All comments
(including any personally identifying information or information for
which a claim of confidentially is asserted either in those comments or
their transmittal emails) will be made available for public inspection
and copying. Parties who wish to comment anonymously may do so by
submitting their comments via Regulations.gov, leaving the fields that
would identify the commenter blank and including no identifying
information in the comment itself. See methods for submitting comments
in the ADDRESSES section of this rule.
Export Administration Act
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., 783 (2002), as amended by Executive Order
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and extended most
recently by the Notice of August 7, 2014, 79 FR 46959 (August 11,
2014), 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 as amended
by Executive Order 13637.
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, reducing costs, harmonizing rules, and promoting flexibility.
This rule has been determined to be a significant regulatory action,
although not economically significant, under section 3(f) of Executive
Order 12866 for purposes of Executive Order 12866. Accordingly, the
rule has been reviewed by the Office of Management and Budget (OMB).
2. This rule amends collections previously approved by the Office
of Management and Budget (OMB) under Control Numbers 0694-0088,
``Simplified Network Application Processing + System (SNAP+) and the
[[Page 58707]]
Multi-Purpose Application,'' which carries a burden hour estimate of
43.8 minutes to prepare and submit form BIS-748; 0694-0089, ``Special
Comprehensive License,'' which carries a burden hour estimate of 40
hours to complete an application, 30 minutes to complete annual
extension requests, 4 hours to complete amendments, and six hours to
perform recordkeeping and internal control program annual
certifications; and 0694-0152, ``Automated Export System (AES)
Program,'' which carries a burden hour estimate of three minutes or
0.05 hours per electronic submission. This requirement has been
submitted to OMB for approval.
The total burden hours associated with the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.) (PRA) and the aforementioned OMB
Control Numbers would be expected to decrease as a result of this
proposed removal of part 752 of the EAR and related provisions this
rule if the rule is eventually issued in final form, thereby reducing
burden hours associated with approved collections related to the EAR.
Public comment is sought regarding: Whether this proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information shall
have practical utility; the accuracy of the burden estimate; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways to minimize the burden of the collection of
information, including through the use of automated collection
techniques or other forms of information technology. Send comments on
these or any other aspects of the collection of information to
Regulatory Policy Division, Bureau of Industry and Security, U.S.
Department of Commerce at the ADDRESSES above, and email to OMB at
OIRASubmission@omb.eop.gov, or fax to (202) 395-7285.
Notwithstanding any other provision of the 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 PRA, unless that collection of information displays
a currently valid OMB Control Number.
3. This rule does not contain policies with Federalism implications
as that term is defined under Executive Order 13132.
4. Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.). 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.
Economic Impact. BIS believes this rule will reduce the economic
impact on impacted entities because although this rule would eliminate
the availability of the SCL, such entities could still obtain
individual validated licenses from BIS to export their product. In
fact, the other licenses available are less burdensome and require
fewer compliance/reporting measures than those associated with SCL. It
would be an overall reduction in burden for an SCL holder to transition
to one of the other available licenses authorized under the EAR. For
example, under the SCL, a license holder was required to implement a
specific internal control program (ICP). Under a license established
under the ECR, the impacted entities would be measured by their
ultimate compliance with the EAR. Also with a license established under
the ECR, SCL holders can transition to a four-year license through the
validated license process. In addition, they have the availability of
license exception Strategic Trade Authorization (STA), which allows
shipments of higher-end controlled items than allowed under the SCL,
when conditions are met. Also, impacted entities would have the
convenience of applying for a license via the Simplified Network
Application Process-Redesign (SNAP-R) System, an updated system for
electronically filing export and reexport license applications.
Number of Small Entities. The types entities that would be directly
impacted by this action include manufactures, oil and gas exploration
and production companies, and exporters and reexporters of various
equipment. Based on a review of current Special Comprehensive License
(SCL) holders, there are less than a dozen entities that have
outstanding licenses for items on the CCL. Due to the nature of the
SCL, BIS expects that most of the current license holders would be
considered large entities under the Small Business Administration's
size standards. However, BIS does not collect data on the size or
annual revenue of these entities, and thus some of these entities may
be considered small under the SBA size standards. Also, although small
entities are not the primary users of the SCL, BIS acknowledges that
small entities may have been parties to SCL transactions. To assist in
the evaluation of a significant economic impact of this rule on a
substantial number of small entities, BIS welcomes comments to explain
how and to what extent your business or organization could be affected,
if your business or organization is a small entity and if adoption of
any of the amendments discussed in this proposed rulemaking could have
a significant financial impact on your operations.
List of Subjects
15 CFR Part 730
Administrative practice and procedure, Advisory committees,
Exports, Reporting and recordkeeping requirements, Strategic and
critical materials.
15 CFR Parts 732, 748, and 752
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Parts 738 and 772
Exports.
15 CFR Part 743
Administrative practice and procedure, Reporting and recordkeeping
requirements.
15 CFR 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
15 CFR 774
Exports, Reporting and recordkeeping requirements.
Accordingly, under the authority of 50 U.S.C. 1701 et seq., parts
730, 732, 738, 743, 748, 752, 762, 772 and 774 of the Export
Administration Regulations (15 CFR parts 730-774) are proposed to be
amended as follows:
PART 730--[AMENDED]
0
1. The authority citation for part 730 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151
note; 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s),
185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C.
1824a; 50 U.S.C. app. 5; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210;
E.O. 11912, 41 FR 15825, 3 CFR, 1976 Comp., p. 114; E.O. 12002, 42
FR 35623, 3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 FR 20947, 3 CFR,
1978 Comp., p. 179; E.O. 12214, 45 FR 29783, 3 CFR, 1980 Comp., p.
256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12854,
58 FR 36587, 3 CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 28205, 3
CFR, 1994 Comp., p. 899; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp.,
p. 950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 356; E.O.
12981, 60 FR 62981, 3 CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR
54079, 3 CFR, 1996 Comp., p. 219; E.O. 13026, 61 FR 58767, 3 CFR,
1996 Comp., p. 228; E.O. 13099, 63 FR 45167, 3 CFR, 1998
[[Page 58708]]
Comp., p. 208; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783;
E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 786; E.O. 13338, 69
FR 26751, 3 CFR, 2004 Comp., p 168; E.O. 13637 of March 8, 2013, 78
FR 16129 (March 13, 2013); Notice of September 18, 2013, 78 FR 58151
(September 20, 2013); Notice of November 7, 2013, 78 FR 67289
(November 12, 2013); Notice of January 21, 2014, 79 FR 3721 (January
22, 2014); Notice of May 7, 2014, 79 FR 26589 (May 9, 2014); Notice
of August 7, 2014, 79 FR 46959 (August 11, 2014).
Sec. 730.8 [Amended]
0
2. Section 730.8 is amended by removing the next to last sentence in
paragraph (a)(5).
Supplement No. 1 to Part 730 [Amended]
0
3. Supplement No. 1 to Part 730 is amended by:
0
a. Revising the entry in the ``Reference in the EAR'' Column for
``Collection number'' ``0694-0088'' to read ``parts 746 and 748; Sec.
762.2(b).'';
0
b. Removing the entire entry for ``Collection number'' ``0694-0089'';
and
0
c. Removing the citations to ``752.7(b)'' and ``752.15(a)'' from the
``Reference in the EAR'' Column for ``Collection number'' ``0607-
0152''.
PART 732--[AMENDED]
0
4. The authority citation for part 732 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 7, 2014, 79 FR
46959 (August 11, 2014).
0
5. Section 732.5 is amended by revising the next to last sentence of
paragraph (b) to read as follows:
Sec. 732.5 Steps Regarding Shipper's Export Declaration or Automated
Export System Record, Destination Control Statements, And
Recordkeeping.
* * * * *
(b) Step 28: Destination Control Statement * * * DCS requirements
do not apply to reexports * * *
* * * * *
Sec. 732.6 [Amended]
0
6. Section 732.6 is amended by removing and reserving paragraph (d).
PART 738--[AMENDED]
0
7. The authority citation for 15 CFR part 738 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c; 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 7, 2014, 79 FR 46959 (August 11, 2014).
Sec. 738.4 [Amended]
0
8. Section 738.4 is amended by removing the phrase ``or Special
Comprehensive License'' at the end of the sixth sentence in paragraph
(b)(3).
PART 743--[AMENDED]
0
9. The authority citation for part 743 continues 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; E.O. 13637 of
March 8, 2013, 78 FR 16129 (March 13, 2013); 78 FR 16129 ; Notice of
August 7, 2014, 79 FR 46959 (August 11, 2014).
Sec. 743.1 [Amended]
0
10. Section 743.1 is amended by removing and reserving paragraph
(b)(2).
Sec. 743.4 [Amended]
0
11. Section 743. 4 is amended by removing and reserving paragraph
(b)(2).
PART 748--[AMENDED]
0
12. The authority citation for 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 7, 2014, 79 FR
46959 (August 11, 2014).
Sec. 748.1 [Amended]
0
13. Section 748.1 is amended by removing the phrase ``Special
Comprehensive License or'' from the parenthetical in the first sentence
in paragraph (d), introductory text.
Sec. 748.4 [Amended]
0
14. Section 748.4 is amended by removing the next to last sentence in
paragraph (h).
Sec. 748.7 [Amended]
0
15. Section 748.7 is amended by removing the phrase ``Special
Comprehensive License and'' from the parenthetical in the second
sentence in paragraph (a) and from the parenthetical in the first
sentence in paragraph (d).
Sec. 748.9 [Amended]
0
16. Section 748.9 is amended by removing and reserving paragraph
(a)(6).
Sec. 748.12 [Amended]
0
17. Section 748.12 is amended by:
0
a. Removing the semicolon and the word ``or'' at the end of paragraph
(a)(1)(ii)
0
b. Adding a period at the end of paragraph (a)(1)(ii); and
0
c. Removing paragraph (a)(1)(iii).
Supplement No. 1 to Part 748 [Amended]
0
18. Supplement No. 1 to Part 748 is amended by:
0
a. Removing the next to last sentence and the caption, ``Special
Comprehensive License'' that precedes it in paragraph ``Block 5:'' and
0
b. Removing and reserving paragraph ``Block 8''.
PART 752--[REMOVED AND RESERVED]
0
19. Remove and reserve part 752.
PART 762--[AMENDED]
0
20. The authority citation for part 762 continues 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
7, 2014, 79 FR 46959 (August 11, 2014).
Sec. 762.2 [Amended]
0
21. Section 762.2 is amended by removing and reserving paragraphs
(b)(31) through (38).
PART 772--[AMENDED]
0
22. The authority citation for part 772 continues 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
7, 2014, 79 FR 46959 (August 11, 2014).
Sec. 772.1 [Amended]
0
23. Section 772.1 is amended by removing the definition ``Controlled In
Fact.''
PART 774--[AMENDED]
0
24. The authority citation for part 774 continues to read as follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et
seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42
U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22
U.S.C. 7201 et seq.; 22 U.S.C. 7210; 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 7, 2014, 79 FR 46959 (August 11, 2014).
Supplement No. 1 to Part 774 [Amended]
0
25. Supplement No. 1 to part 774 (the Commerce Control List) is amended
by removing the phrase ``Special
[[Page 58709]]
Comprehensive Licenses,'' wherever it is found.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2014-23078 Filed 9-29-14; 8:45 am]
BILLING CODE 3510-33-P
