Foreign Trade Regulations (FTR): State Department Directorate of Defense Trade Controls Filing Requirement and Clarifications to Current Requirements, 54234-54237 [2023-16970]

Agencies

• Census Bureau
• DEPARTMENT OF COMMERCE

[Federal Register Volume 88, Number 153 (Thursday, August 10, 2023)]
[Rules and Regulations]
[Pages 54234-54237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16970]


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DEPARTMENT OF COMMERCE

Census Bureau

15 CFR Part 30

[Docket No. 230802-0181]
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: Final rule.

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SUMMARY: The Census Bureau issues this final rule amending 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 adding 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, this rule makes 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. This rule also makes other remedial changes to 
the FTR.

DATES: This final rule is effective November 8, 2023.

FOR FURTHER INFORMATION CONTACT: Omari S. Wooden, Assistant Division 
Chief, Data User and Respondent Outreach, Economic Management Division, 
Census Bureau by phone (301) 763-3829 or by email 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Census Bureau is amending the Foreign Trade Regulations (FTR) 
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 Electronic Export Information (EEI). The FTR 
defines the DDTC USML Category Code as the USML category of the article 
being exported (22 CFR) part 121).
    Public Law 106-113 amended 13 U.S.C. 301, to add subsection ``(h)'' 
directing the Secretary of Commerce to require, by regulation, 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, 
U.S.C., the Secretary of Commerce will collect additional data on the 
export of items under DDTC USML Category Code ``21'' to identify and 
validate commodities for which DDTC USML Category Code ``21'' is cited.
    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 published a Notice of Proposed Rulemaking (NPRM) 
in the Federal Register on May 3, 2023 (88 FR 27815) to add the 
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) as well as to make the remedial changes 
originally proposed in the NPRM published December 15, 2021 in the 
Federal Register (86 FR 71187). Comments to these remedial 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.

Response to Comments

    The Census Bureau received three comments on the NPRMs published in 
the Federal Register on December 15, 2021 (86 FR 71187) and May 3, 2023 
(88 FR 27815). A summary of the comments and the Census Bureau's 
response are provided below.
    Comment. The commenter stated that it is unclear if the Census 
Bureau proposed to update the published penalty amount in Sec.  30.71 
as it still states $10,000 and has not been $10,000 for years. The 
commentor suggested to update the correct current amount, in 
conjunction with the footnote update proposed.
    Response. The Census Bureau has reviewed this comment and disagrees 
that the amount shown in Sec.  30.71 should reflect the current amount 
with the footnote to address the adjustment for inflation. The $10,000 
referenced in Sec.  30.71 is consistent with 13 U.S.C. 305. The current 
penalty amounts are published in 15 CFR 6.3(d).
    Comment. The commenter recommends that the Census Bureau eliminate 
the Dun and Bradstreet Number (DUNS) for reporting the U.S. Principal 
Party in Interest Identification Number (USPPI ID) because reporting 
the DUNS requires the company to also report their Employer 
Identification Number (EIN) and adds to reporting burden and filing 
mistakes thus increasing risks of incurring a fine and/or penalty. The 
commenter also recommended that the Census Bureau review and publish 
the percentage of shipments where the DUNS is used as the filer ID. The 
commenter also stated that if the Census Bureau decides to keep the 
DUNS as a USPPI ID, then Sec.  30.3(e)(1)(ii) needs to reflect that 
when the USPPI uses the DUNS as their filer ID, they must also provide 
the FPPI's authorized agent their EIN. As currently proposed in the 
NPRM, the USPPI either provides the EIN or DUNS.
    Response. The Census Bureau has reviewed this comment and disagrees 
with removing the DUNS as an option for reporting the USPPI ID. USPPIs 
who have postdeparture filing privileges support the use of the DUNS as 
the USPPI ID because USPPIs prefer to have the less sensitive DUNS 
rather than the EIN shown on the front page of bills of

[[Page 54235]]

lading/air waybills and other commercial documents as part of the 
postdeparture filing citation. However, as a result of this comment, 
FTR Appendix B to Part 30--AES Filing Citation, Exemption and Exclusion 
Legends (II and III) will be changed from USPPI EIN to USPPI 
Identification Number to allow either the EIN or DUNS. In regard to the 
comment of the USPPI using the DUNS as the filer ID, the Census Bureau 
agrees and has changed Sec.  30.3(e)(1)(ii) to reflect the requirement 
to provide the USPPI Identification Number as defined under Sec.  
30.6(a)(1)(iii).
    Comment. The commenter expressed appreciation for the clarification 
of Sec.  30.6(a)(1)(iii); specifically, clarifying that, when the DUNS 
is reported as the USPPI ID type, the EIN is also required. The 
commenter stated that the use of the DUNS and EIN as the USPPI ID has 
been a mystery to most EEI filers and many EEI transmission software 
systems are not programmed to accommodate this requirement. According 
to the commenter, the users of many transmission software systems 
select USPPI ID type as either DUNS or EIN and then enter a number. 
Selecting the DUNS option alone fails. As a result, users typically 
select the ``EIN'' option and then enter a DUNS number. Alternatively, 
filers will obtain an EIN and only report that number. Therefore, the 
commenter stated that the practice is that many, if not most, filers do 
not report both the DUNS and EIN. The commenter believes that it is 
unlikely, even with this clarification, that EEI filers will begin to 
transmit both DUNS and EIN or that software providers will change their 
systems. The commenter stated that it would be helpful if Census could 
provide further information on the reason and value of receiving the 
DUNS number.
    Response. The Census Bureau historically has given USPPIs the 
option of providing the DUNS or EIN as the USPPI ID. The option of 
reporting the less sensitive DUNS instead of the EIN became more 
favorable to USPPIs who were approved for the postdeparture filing 
program because the postdeparture filing exemption contains the USPPI 
ID which is visible on the front of commercial documents. However, when 
the DUNS is reported as the USPPI ID in the AES, the Census Bureau also 
requires an EIN. The Census Bureau must have the EIN to link to the 
Business Register to collect information for the Profile of U.S. 
Exporting Companies statistical release.

Changes to the Proposed Rule Made by This Final Rule

    As discussed above, after consideration of the comments received on 
the proposed rule, the Census Bureau includes in this final rule an 
additional change to Sec.  30.3(e)(1)(ii) to reference the USPPI 
Identification Number instead of USPPI EIN or DUNS. This change will 
provide consistency with Sec.  30.6(a)(1)(iii), which states that, if 
the USPPI Identification Number is reported as a DUNS, the submission 
of the EIN of the USPPI also is required. Additionally, FTR Appendix B 
to Part 30--AES Filing Citation, Exemption and Exclusion Legends (II 
and III) will be changed from USPPI EIN to USPPI Identification Number 
to allow further consistency with Sec.  30.6(a)(1)(iii).

Program Requirements

    Pursuant to the Foreign Relations Act, Public Law 107-228 and 13 
U.S.C. 302, the Census Bureau is amending relevant sections of the FTR 
to revise or clarify export reporting requirements. Therefore, the 
Census Bureau is amending 15 CFR part 30 by making the following 
revisions:
     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.  30.3(e)(1)(ii) to remove USPPI EIN or DUNS 
and replace with USPPI Identification Number.
     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 nine 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.
     Revise FTR Appendix B to Part 30--AES Filing Citation, 
Exemption and Exclusion Legends (II and III) to remove USPPI EIN and 
add in its place USPPI Identification Number.

Rulemaking Requirements

Regulatory Flexibility Act

    The Chief Counsel for Regulation of the Department of Commerce has 
certified to the Chief Counsel for Advocacy, Small Business 
Administration that this rule will not have a significant economic 
impact on a substantial number of small entities. There were no 
comments on this certification in the proposed rule.
    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. Under this final rule, 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

[[Page 54236]]

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 rule will not 
create any economic impact on companies including a substantial number 
of small entities. As a result, a final regulatory flexibility analysis 
is not required, and none has been prepared.

Executive Orders

    This rule has been determined to not be significant for purposes of 
Executive Order 12866. This 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.
    The information collection requirements included in this rule will 
be submitted to OMB for review under OMB Control Number 0607-0152. The 
information collection associated with that control number was approved 
after 60-day and 30-day public comment periods (87 FR 70777; 88 FR 
7680). This rule changes existing requirements for the information 
collection but will not impact the current reporting-hour burden 
approved under that control number. 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. Submit 
comments on these or any other aspects of the collection of information 
to www.reginfo.gov/public/do/PRAMain. Find this collection under OMB 
Control Number 0607-0152--AES Program.
    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 
amending 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 Identification Number.
* * * * *

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 relating to the copies on file in CBP offices. The 
importer or import broker must provide the Census Bureau with

[[Page 54237]]

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.
* * * * *

0
9. Amend appendix B by revising the entries for ``II. Postdeparture 
Citation--USPPI'' and ``III. Postdeparture Citation-Agent'' to read as 
follows

Appendix B to Part 30--AES Filing Citation, Exemption and Exclusion 
Legend

* * * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
II. Postdeparture Citation--USPPI,       AESPOST USPPI Identification
 USPPI is filing the EEI.                 Number Date of Export (mm/dd/
                                          yyyy).
                                         Example: AESPOST 12345678912 01/
                                          01/2017.
III. Postdeparture Citation--Agent,      AESPOST USPPI Identification
 Agent is filing the EEI.                 Number--Filer ID Date of
                                          Export (mm/dd/yyyy).
                                         Example: AESPOST 12345678912--
                                          987654321 01/01/2017.
------------------------------------------------------------------------

* * * * *

    Dated: August 3, 2023.
Shannon Wink,
Program Analyst, Policy Coordination Office, U.S. Census Bureau.
[FR Doc. 2023-16970 Filed 8-9-23; 8:45 am]
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