Foreign Trade Regulations (FTR): Clarification on the Collection and Confidentiality of Kimberley Process Certificates, 17749-17751 [2018-08518]

Agencies

• DEPARTMENT OF COMMERCE
• Bureau of the Census

[Federal Register Volume 83, Number 79 (Tuesday, April 24, 2018)]
[Rules and Regulations]
[Pages 17749-17751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08518]


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DEPARTMENT OF COMMERCE

Bureau of the Census

15 CFR Part 30

[Docket Number: 140905758-8166-02]
RIN 0607-AA54


Foreign Trade Regulations (FTR): Clarification on the Collection 
and Confidentiality of Kimberley Process Certificates

AGENCY: Bureau of the Census, Commerce Department.

ACTION: Final rule.

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SUMMARY: The Bureau of the Census (Census Bureau) issues this final 
rule amending its regulations to clarify that the data collected from 
the Kimberley Process Certificates (KPCs) are collected in compliance 
with the Clean Diamond Trade Act. In addition, this rule clarifies the 
submission requirements and permissible uses of the KPCs.

DATES: This final rule is effective July 23, 2018.

FOR FURTHER INFORMATION CONTACT: Dale C. Kelly, Chief, International 
Trade Management Division, U.S. Census Bureau, 4600 Silver Hill Road, 
Washington, DC 20233-6010, by phone at 301-763-6937; by fax at 301-763-
8835; or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Census Bureau is amending the Foreign Trade Regulations (FTR) 
(15 CFR part 30) to clarify that the Kimberley Process Certificates 
(KPCs) are not collected under Title 13, United States Code (U.S.C.). 
Instead, the KPCs are collected under the Clean Diamond Trade Act 
(CDTA) (Pub. L. 108-19, 19 U.S.C. 3901, et seq.) and Executive Order 
13312, entitled ``Implementing the Clean Diamond Trade Act'' (68 FR 
45151, July 29, 2003). The CDTA and Executive Order 13312 require that 
the importation into, and exportation from, the United States of any 
rough diamonds be controlled through the Kimberley Process 
Certification Scheme (KPCS). The KPCS calls on Participants

[[Page 17750]]

(i.e., governments participating in the KPCS), including the United 
States, to ensure that any shipment of rough diamonds exported to, or 
imported from, the territory of a Participant be accompanied by a valid 
KPC, and maintain and publish statistics on the importation and 
exportation of rough diamonds. The CDTA further provides that the 
United States should produce statistics on imports and exports of rough 
diamonds and make these statistics available for analysis by interested 
parties, including other governments participating in the KPCS.
    Consistent with the CDTA, Executive Order 13312, and the KPCS, the 
Office of Foreign Assets Control's Rough Diamonds Control Regulations 
(31 CFR part 592) require that an original KPC accompany all shipments 
of rough diamonds imported into, or exported from, the United States. 
The FTR requires that Participants provide an original KPC to the 
Census Bureau for all import and export shipments of rough diamonds. 
The data collected from the KPCs are separate and distinct from the 
statistical data collected under Title 13, U.S.C., and are not governed 
by the confidentiality provisions of that title.
    Finally, the U.S. Department of Homeland Security and the U.S. 
Department of State concur with the revisions to the FTR as required by 
13 U.S.C. 302 and Public Law 107-228, div. B, title XIV, section 1404.

Response to Comments

    The Census Bureau received two comments on the notice of proposed 
rulemaking (NPRM) published in the Federal Register on September 29, 
2017 (82 FR 45528). One of the comments was unrelated to the proposal; 
however, a summary of the other comment and the Census Bureau's 
response is provided below.
    Comment. The commenter stated that, to help ensure compliance with 
the law and avoid misunderstandings, the Census Bureau's final rule 
should make clear, for the benefit of both the public and Department of 
Commerce employees, that the rule changes do not displace the 
confidentiality provisions of any statute other than Title 13. The 
commenter suggested adding the language, ``nothing in this subsection 
affects the applicability of confidentiality provisions of a law other 
than Title 13, U.S.C.,'' to Sec. Sec.  30.4(e) and 30.60 of the FTR.
    Response. The Census Bureau has reviewed this comment and agrees 
that clarifying language can be added to address this concern in Sec.  
30.60, because it addresses the confidentiality of KPCs, including 
voided KPCs. Therefore, the Note to Sec.  30.60, as amended by this 
final rule, will read as set out in the regulatory text at the end of 
the document.

Changes to the Proposed Rule Made by This Final Rule

    As discussed above, after consideration of the comment received, 
the Census Bureau includes in this final rule an additional clarifying 
sentence at the end of the language in the proposed rule regulatory 
text for the Note to Sec.  30.60. For clarification, consistent with 
terminology used in the FTR, the Census Bureau also includes in this 
final rule the addition of the phrase ``by the USPPI or U.S. authorized 
agent'' to the proposed rule regulatory text revising Sec.  30.7(c).

Program Requirements

    This final rule amends relevant sections of the FTR in order to 
clarify requirements, consistent with the CDTA and Executive Order 
13312. Specifically, in addition to the clarifying changes described 
above, this final rule makes the following revisions to the FTR in 15 
CFR part 30:
     Revise Sec.  30.1(c) to add the definition ``Kimberley 
Process Certificate'' as a technical amendment.
     Revise Sec.  30.1(c) to add the definition ``Voided 
Kimberley Process Certificate'' to clarify the term.
     Revise Sec.  30.4 to add paragraph (e) to clarify the 
filing procedures for voided KPCs and to address that the collection of 
KPCs is not pursuant to Title 13, United States Code.
     Revise Sec.  30.7(c) to clarify that KPCs must be provided 
to the Census Bureau immediately after export of the shipment from the 
United States.
     Revise Sec.  30.50(c) to clarify that KPCs must be 
provided to the Census Bureau immediately after entry of the shipment 
in the United States.
     Revise Sec.  30.60 to add a note clarifying that KPCs are 
not considered Electronic Export Information (EEI) and are not 
confidential under Title 13, U.S.C.
     Revise Sec.  30.70 to clarify how violations of the CDTA 
will be enforced.

Rulemaking Requirements

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA) that this rule will not have a significant impact 
on a substantial number of small entities. Currently, a KPC must be 
submitted for all imports or exports of rough diamonds. This rule 
requires that KPCs be provided to the Census Bureau immediately after 
either entry in or export from the United States. It replaces the 
previous requirement to provide the KPC to the Census Bureau in 
advance.
    This action requires that U.S. Principal Party in Interests 
(USPPIs) or authorized agents in the United States file export 
information to the Automated Export System (AES) for all shipments 
where an EEI record is required by the FTR. The SBA's table of size 
standards indicates that businesses that are the USPPI or authorized 
agent and file EEI are considered small businesses if they employ less 
than 500 people. Based on Exhibit 7a of the 2015 Profile of U.S. 
Exporting Companies, the Census Bureau estimates that there are 295,000 
USPPIs that are considered small business entities under the SBA 
definition, and more than 90 percent of those USPPIs use authorized 
agents to file export information. The Census Bureau is unable to 
estimate or determine the number of authorized agents.
    The Census Bureau does not expect these clarifications of 
requirements to significantly affect the small businesses that file 
through the AES. The majority of agents require use of a computer to 
perform routine tasks, such as filing through the AES. These agents are 
unlikely to be significantly affected by these clarifications of 
requirements, as they already possess the necessary technology and 
equipment to submit the information through the AES. It is not 
necessary for small businesses to purchase software for this task, 
because AES Direct, a free internet-based system, is provided for the 
electronic submission of export information. The new requirements will 
have a minimal impact on response burden. For these reasons, this rule 
will not have a significant economic impact on a substantial number of 
small entities.

Executive Orders

    This rule has been determined to be not significant for purposes of 
Executive Order 12866. This proposed rule is not an Executive Order 
13771 regulatory action because this proposed rule is not significant 
under Executive Order 12866. This rule does not contain policies with 
federalism implications as that term is defined under Executive Order 
13132.

Paperwork Reduction Act

    Notwithstanding any other provision of law, no person is required 
to respond to, nor shall a person be subject to a penalty for failure 
to comply with, a

[[Page 17751]]

collection of information subject to the requirements of the Paperwork 
Reduction Act (PRA), unless that collection of information displays a 
current, valid Office of Management and Budget (OMB) control number. 
This rule contains a collection-of-information subject to the 
requirements of the PRA (44 U.S.C. 3501 et seq.) and that has been 
approved under OMB control number 0607-0152.

List of Subjects in 15 CFR Part 30

    Economic statistics, Exports, Foreign trade, Reporting and 
recordkeeping requirements.

    For the reasons set out in the preamble, the Census Bureau amends 
15 CFR part 30 as follows:

PART 30--FOREIGN TRADE REGULATIONS

0
1. The authority citation for 15 CFR part 30 continues to read as 
follows:

    Authority:  5 U.S.C. 301; 13 U.S.C. 301-307; Reorganization plan 
No. 5 of 1990 (3 CFR 1949-1953 Comp., p. 1004); Department of 
Commerce Organization Order No. 35-2A, July 22, 1987, as amended, 
and No. 35-2B, December 20, 1996, as amended; Pub. L. 107-228, 116 
Stat. 1350.

0
2. Amend Sec.  30.1(c) by adding definitions for ``Kimberley Process 
Certificate (KPC)'' and ``Voided Kimberley Process Certificate'' in 
alphabetical order to read as follows:


Sec.  30.1  Purpose and definitions.

* * * * *
    (c) * * *
    Kimberley Process Certificate (KPC). A forgery resistant document 
used to certify the origin of rough diamonds from sources which are 
free of conflict.
* * * * *
    Voided Kimberley Process Certificate. A Kimberley Process 
Certificate intended to be used for the exportation of rough diamonds 
from the United States that has been cancelled for reasons such as loss 
or error.
* * * * *

0
3. Amend Sec.  30.4 by adding paragraph (e) to read as follows:


Sec.  30.4  Electronic Export Information filing procedures, deadlines, 
and certification statements.

* * * * *
    (e) Collection of KPCs and voided KPCs. Any voided KPC must be 
faxed by the voiding party to the Census Bureau on (800) 457-7328, or 
provided by other methods as permitted by the Census Bureau, 
immediately upon voiding. The collection of KPCs, including voided 
KPCs, is performed pursuant to the Clean Diamond Trade Act, Public Law 
108-19, 19 U.S.C. Section 3901 et seq. (CDTA), and Executive Order 
13312, and not Title 13, U.S.C.

0
4. Amend Sec.  30.7 by revising paragraph (c) to read as follows:


Sec.  30.7  Annotating the bill of lading, air waybill, or other 
commercial loading documents with proof of filing citations, and 
exemption legends.

* * * * *
    (c) Exports of rough diamonds classified under HS subheadings 
7102.10, 7102.21, and 7102.31 require the proof of filing citation, as 
stated in paragraph (b) of this section, to be indicated on the 
Kimberley Process Certificate (KPC). In addition, the KPC must be faxed 
by the USPPI or U.S. authorized agent to the Census Bureau on (800) 
457-7328, or provided by other methods as permitted by the Census 
Bureau, immediately after export of the shipment from the United 
States.

0
5. Amend Sec.  30.50 by revising paragraph (c) to read as follows:


Sec.  30.50  General requirements for filing import entries.

* * * * *
    (c) The Kimberley Process Certificate (KPC) for all imports of 
rough diamonds classified under HS subheadings 7102.10, 7102.21, 
7102.31 must be faxed by the importer or customs broker to the Census 
Bureau on (800) 457-7328, or provided by other methods as permitted by 
the Census Bureau, immediately after entry of the shipment in the 
United States.

0
6. Amend Sec.  30.60 by adding a note to read as follows:


Sec.  30.60  Confidentiality of Electronic Export Information.

* * * * *
    Note to Sec.  30.60: Kimberley Process Certificates (KPCs), 
including voided KPCs, provided to the Census Bureau pursuant to the 
Clean Diamond Trade Act, Executive Order 13312, and this part are not 
considered EEI and are not confidential under Title 13. KPCs and voided 
KPCs may be protected from public disclosure by the Privacy Act or 
other applicable nondisclosure statutes.

0
7. Amend Sec.  30.70 by revising the introductory text to read as 
follows:


Sec.  30.70  Violation of the Clean Diamond Trade Act.

    Section 8(c) of the Clean Diamond Trade Act (CDTA) authorizes U.S. 
Customs and Border Protection (CBP) and U.S. Immigration and Customs 
Enforcement (ICE) to enforce the laws and regulations governing exports 
of rough diamonds. The Treasury Department's Office of Foreign Assets 
Control (OFAC) also has enforcement authority pursuant to section 5(a) 
of the CDTA, Executive Order 13312, and Rough Diamonds Control 
Regulations (31 CFR part 592). CBP, ICE, and OFAC are authorized to 
enforce provisions of the CDTA providing the following civil and 
criminal penalties:
* * * * *

    Dated: April 17, 2018.
Ron S. Jarmin,
Associate Director for Economic Programs, performing the non-exclusive 
functions and duties of the Director, Bureau of the Census.
[FR Doc. 2018-08518 Filed 4-23-18; 8:45 am]
BILLING CODE 3510-07-P