Foreign Trade Regulations (FTR): State Department Directorate of Defense Trade Controls Filing Requirement and Clarifications to Current Requirements, 27815-27818 [2023-09322]

Agencies

• Census Bureau
• DEPARTMENT OF COMMERCE

[Federal Register Volume 88, Number 85 (Wednesday, May 3, 2023)]
[Proposed Rules]
[Pages 27815-27818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09322]


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DEPARTMENT OF COMMERCE

Census Bureau

15 CFR Part 30

[DOCKET NO. 230421-0109]
RIN 0607-AA61


Foreign Trade Regulations (FTR): State Department Directorate of 
Defense Trade Controls Filing Requirement and Clarifications to Current 
Requirements

AGENCY: Census Bureau, Commerce Department.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Census Bureau is proposing to amend its regulations to 
reflect new export reporting requirements related to the State 
Department, Directorate of Defense Trade Controls (DDTC) Category XXI 
Determination Number. Specifically, the Census Bureau is proposing to 
add a conditional data element, DDTC Category XXI Determination Number, 
when ``21'' is selected in the DDTC USML Category Code field in the 
Automated Export System (AES) to represent United States Munitions List 
(USML) Category XXI. In addition to the new export reporting 
requirement, the proposed rule would make remedial changes to the 
Foreign Trade Regulations (FTR) to update International Traffic in Arms 
Regulations (ITAR) references in existing data elements: DDTC 
Significant Military Equipment Indicator and DDTC Eligible Party 
Certification Indicator. The proposed rule also makes remedial changes 
to the FTR that were proposed in the Notice of Proposed Rulemaking 
published December 15, 2021.

DATES: Written comments must be received on or before July 3, 2023.

ADDRESSES: You may submit comments by any of the following methods:

[[Page 27816]]

     Federal eRulemaking Portal: https://www.regulations.gov. 
The identification number for this rulemaking is identified by RIN 
0607-AA61; or
     By email directly to census.gov">[email protected]census.gov. Include 
RIN 0607-AA61 in the subject line.
    All comments received are part of the public record. No comments 
will be posted to https://www.regulations.gov for public viewing until 
after the comment period has closed. Comments will generally be posted 
without change. All Personally Identifiable Information (for example, 
name and address) voluntarily submitted by the commenter may be 
publicly accessible. Do not submit confidential business information or 
otherwise sensitive or protected information.

FOR FURTHER INFORMATION CONTACT: Lisa E. Donaldson, Chief, Economic 
Management Division, Census Bureau by phone (301) 763-7296 or by email 
census.gov">[email protected]census.gov.

SUPPLEMENTARY INFORMATION: 

Background

    The Census Bureau is responsible for collecting, compiling, and 
publishing export trade statistics for the United States under the 
provisions of title 13, United States Code (U.S.C.), chapter 9, section 
301. Additionally, the Census Bureau is responsible for publishing the 
Foreign Trade Regulations (FTR) that set the export reporting 
requirements for Electronic Export Information (EEI). The EEI is made 
up of mandatory, conditional, and optional data elements. The purpose 
of this rulemaking is to add a conditional data element, Directorate of 
Defense Trade Controls (DDTC) Category XXI Determination Number, when 
``21'' (see Appendix L of the Automated Export System Trade Interface 
Requirements (AESTIR)) is selected in the DDTC United States Munitions 
List (USML) Category Code field in the EEI. The FTR defines the DDTC 
USML Category Code as the USML category of the article being exported 
(22 CFR part 121).
    The Congressional mandate in Public Law 106-113 that amended 
section 301, of title 13 of the U.S. Code authorized the Secretary of 
Commerce to require the mandatory electronic filing of export 
information through the Automated Export System (AES) for items 
identified in the Commerce Control List (CCL) and the USML. Under the 
authorities in chapter 9 of title 13, the Secretary of Commerce 
proposes to collect additional data on the export of items under DDTC 
USML Category Code ``21'' to identify and validate which commodities 
DDTC USML Category Code ``21'' was cited for.
    The DDTC Category XXI Determination Number is a unique number 
issued by DDTC in conjunction with a notification that a specific 
commodity is described in USML Category XXI. Information on valid USML 
Category XXI determinations and the prospective AES error code may be 
found in the Frequently Asked Questions section of DDTC's website 
(www.pmddtc.state.gov).
    The Census Bureau is seeking public comments from data users, 
businesses and others to assess this proposed change. Below are 
considerations when providing feedback to this proposed rule; however, 
any pertinent feedback not captured by these considerations is welcome.
    1. Describe the potential value of adding the DDTC Category XXI 
Determination Number to the EEI.
    2. How long would a company that utilizes or manages proprietary 
software need to make programming changes to potentially add the DDTC 
Category XXI Determination Number field to its interface to the AES?
    3. Are there business practices that a company would need to 
implement in order to come into compliance with the reporting of the 
DDTC Category XXI Determination Number field? If so, how long would a 
company need to implement new business practices?
    The proposed rule also makes remedial changes to the FTR that were 
proposed in the Notice of Proposed Rulemaking published December 15, 
2021 in the Federal Register, Volume 86, No. 238 (2021-26874.pdf 
(census.gov), and comments to these changes were favorable.
    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, division B, title XIV, section 
1404.

Program Requirements

    Pursuant to the Foreign Relations Act, Public Law 107-228 and 13 
U.S.C. 301 302, the Census Bureau is amending relevant sections of the 
FTR to revise or clarify export reporting requirements. Therefore, the 
Census Bureau is proposing to amend 15 CFR part 30 by making the 
following amendments:
     Revise Sec.  30.2(d)(3) to remove the language, ``(See 
subpart B of this part for export control requirements for these types 
of transactions.),'' as the exclusion overrides the export control 
requirements.
     Revise Sec.  30.6(a)(1)(iii) to clarify that when the Dun 
and Bradstreet Number (DUNS) is reported as the U.S. Principal Party in 
Interest (USPPI) Identification Number, the Employer Identification 
Number (EIN) of the USPPI also is required to be reported in the 
Automated Export System.
     Revise Sec.  30.6(b)(3) to amend the Foreign Trade Zone 
(FTZ) identifier to allow for 9-digits. The increased number of digits 
is required because of the increase in the number of subzones.
     Revise Sec.  30.6(b)(16)(ii) to amend the DDTC Significant 
Military Equipment (SME) indicator by updating the ITAR references as a 
result of DDTC relocating certain ITAR provisions to improve the 
overall structure of the ITAR.
     Revise Sec.  30.6(b)(16)(iii) to amend the DDTC eligible 
party certification indicator by updating the ITAR references as a 
result of DDTC relocating certain ITAR provisions to improve the 
overall structure of the ITAR.
     Revise Sec.  30.6(b)(16)(ix) to add the conditional data 
element ``DDTC Category XXI Determination Number.'' The ``DDTC Category 
XXI Determination Number'' will be the unique number issued by DDTC to 
a member of the regulated community (usually the original equipment 
manufacturer) in conjunction with a notification that a specific 
commodity is described in USML Category XXI. This number is required 
only when citing Category XXI as an export classification and is used 
to confirm that an authoritative DDTC USML Category XXI determination 
is being referenced to do so.
     Revise Sec.  30.37(u) to remove and reserve the exemption 
for technical data. This exemption is covered under Sec.  30.2(d)(3), 
making the exemption redundant.
     Revise Sec.  30.55 to remove the citation ``19 CFR 103.5'' 
and add in its place ``19 CFR part 103.''
     Revise Sec.  30.71 to amend the Note to paragraph (b) to 
address the yearly adjustments for civil penalties as a result of 
inflation.
     Revise Sec.  30.74 to amend paragraph (c)(5) to remove 
information that may become outdated and referencing the Census Bureau 
website to obtain the most current method for submitting a Voluntary 
Self-Disclosure.

Rulemaking Requirements

Regulatory Flexibility Act

    The Chief Council for Regulation of the Department of Commerce has 
certified to the Chief Counsel for Advocacy, Small Business 
Administration that this proposed rule will not have a significant 
economic impact on a substantial number of small entities.

[[Page 27817]]

    In the current Foreign Trade Regulations, the Electronic Export 
Information (EEI) shall be filed through the Automated Export System 
(AES) for all exports of physical goods. The AES is the electronic 
system for collecting Shipper's Export Declaration (SED) (or any 
successor document) information from persons exporting goods from the 
United States, Puerto Rico, Foreign Trade Zones located in the United 
States and Puerto Rico, the U.S. Virgin Islands, between the U.S. and 
Puerto Rico, and to the U.S. Virgin Islands from the United States or 
Puerto Rico. In the proposed revisions, export shipments with ``21'' in 
the DDTC USML Category Code field will be required to report the DDTC 
Category XXI Determination Number.
    In calendar year 2022, authorized agents and U.S. Principal Parties 
in Interest reported the DDTC USML Category Code of ``21'' on 0.6% of 
EEI records. A large majority of the EEI records involved export 
shipments of defense articles from branches of the Department of 
Defense. Based on these statistics, the Census Bureau believes this 
proposed rule will not create any economic impact on all companies 
including a substantial number of small entities.

Executive Orders

    This proposed rule has been determined to not be significant for 
purposes of Executive Order 12866. This proposed rule does not contain 
policies with federalism implications sufficient to warrant preparation 
of a federalism assessment under Executive Order 13132.

Paperwork Reduction Act

    Notwithstanding any other provisions of law, no person is required 
to respond to, nor shall a person be subject to, a penalty for failure 
to comply with a collection of information subject to the requirements 
of the Paperwork Reduction Act (PRA) unless that collection of 
information displays a valid Office of Management and Budget (OMB) 
control number.
    This proposed rule covers collections of information subject to the 
provisions of the PRA, which are cleared by OMB under OMB Control 
Number 0607-0152--AES Program.
    This proposed rule will not impact the current reporting-hour 
burden requirements as approved under OMB Control Number 0607-0152 
under provisions of the PRA. The proposed rule will not require any 
revisions to the information sought under OMB Control Number 0607-0152. 
Robert L. Santos, Director, Census Bureau, approved the publication of 
this notification in the Federal Register.

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 is 
proposing to amend 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; Public Law 107-228, 
116 Stat. 1350.

0
2. Amend Sec.  30.2 by revising paragraph (d)(3) to read as follows:


Sec.  30.2  General requirements for filing Electronic Export 
Information (EEI).

* * * * *
    (d) * * *
    (3) Electronic transmissions and intangible transfers.
* * * * *
0
3. Amend Sec.  30.3 by revising paragraphs (e)(1)(ii) to read as 
follows:


Sec.  30.3  Electronic Export Information filer requirements, parties 
to export transactions, and responsibilities of parties to export 
transactions.

* * * * *
    (e) * * *
    (1) * * *
    (ii) USPPI's EIN or DUNS.
* * * * *
0
4. Amend Sec.  30.6 by revising paragraphs (a)(1)(iii), (b)(3), 
(b)(16)(ii) and (iii), and adding paragraph (b)(16)(ix) to read as 
follows:


Sec.  30.6  Electronic Export Information data elements.

* * * * *
    (a) * * *
    (1) * * *
    (iii) USPPI identification number. Report the Employer 
Identification Number (EIN) of the USPPI. If the USPPI has only one 
EIN, report that EIN. If the USPPI has more than one EIN, report the 
EIN that the USPPI uses to report employee wages and withholdings, and 
not the EIN used to report only company earnings or receipts. Use of 
another company's EIN is prohibited. If a USPPI reports a DUNS, the EIN 
is also required to be reported. If a foreign entity is in the United 
States at the time goods are purchased or obtained for export, the 
foreign entity is the USPPI. In such situations, when the foreign 
entity does not have an EIN, the authorized agent shall report a border 
crossing number, passport number, or any number assigned by CBP on 
behalf of the foreign entity.
* * * * *
    (b) * * *
    (3) FTZ identifier. If goods are removed from a FTZ and not entered 
for consumption, report the FTZ identifier. This is the unique 9-digit 
alphanumeric identifier assigned by the Foreign Trade Zone Board that 
identifies the FTZ, subzone or site from which goods are withdrawn for 
export.
* * * * *
    (16) * * *
    (ii) DDTC Significant Military Equipment (SME) indicator. A term 
used to designate articles on the USML (22 CFR part 121) for which 
special export controls are warranted because of their capacity for 
substantial military utility or capability. See sections 120.36 and 
120.10(c) of the ITAR (22 CFR parts 120 through 130) for a definition 
of SME and for items designated as SME articles, respectively.
    (iii) DDTC eligible party certification indicator. Certification by 
the U.S. exporter that the exporter is an eligible party to participate 
in defense trade. See 22 CFR 120.16(c). This certification is required 
only when an exemption is claimed.
* * * * *
    (ix) DDTC Category XXI Determination Number. The unique number 
issued by DDTC to a member of the regulated community (usually the 
original equipment manufacturer) in conjunction with a notification 
that a specific commodity is described in USML Category XXI. This 
number is required only when citing USML Category XXI as an export 
classification and is used to confirm that an authoritative USML 
Category XXI determination is being referenced to do so.
* * * * *


Sec.  30.37  [Amended]

0
5. Amend Sec.  30.37 by removing and reserving paragraph (u).
0
6. Amend Sec.  30.55 by revising the introductory text to read as 
follows:


Sec.  30.55  Confidential information, import entries, and withdrawals.

    The contents of the statistical copies of import entries and 
withdrawals on file with the Census Bureau are treated as confidential 
and will not be released without authorization by CBP, in accordance 
with 19 CFR part 103

[[Page 27818]]

relating to the copies on file in CBP offices. The importer or import 
broker must provide the Census Bureau with information or documentation 
necessary to verify the accuracy or resolve problems regarding the 
reported import transaction.
* * * * *
0
7. Amend Sec.  30.71 by revising the note to paragraph (b) to read as 
follows:


Sec.  30.71  False or fraudulent reporting on or misuse of the 
Automated Export System.

* * * * *

    Note 1 to paragraph (b):  The civil monetary penalties are 
adjusted for inflation annually based on The Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410; 28 U.S.C. 2461), 
as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 
104-134) and the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (Section 701 of Pub. L. 114-74). In 
accordance with this Act, as amended, the penalties in title 13, 
chapter 9, sections 304 and 305(b), United States Code are adjusted 
and published each year in the Federal Register no later than 
January 15th.

0
8. Amend Sec.  30.74 by revising paragraph (c)(5) to read as follows:


Sec.  30.74  Voluntary self-disclosure.

* * * * *
    (c) * * *
    (5) Where to make voluntary self-disclosures. The information 
constituting a Voluntary Self-Disclosure or any other correspondence 
pertaining to a Voluntary Self-Disclosure may be submitted to the U.S. 
Census Bureau, Branch Chief, Trade Regulations Branch by methods 
permitted by the Census Bureau. See www.census.gov/trade for more 
details.
* * * * *

    Dated: April 25, 2023.
Shannon Wink,
Program Analyst, Policy Coordination Office, U.S. Census Bureau.
[FR Doc. 2023-09322 Filed 5-2-23; 8:45 am]
BILLING CODE 3510-07-P