[Federal Register Volume 74, Number 232 (Friday, December 4, 2009)]
[Proposed Rules]
[Pages 63685-63688]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28982]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Parts 740, 748, 750 and 762
[Docket No. 0907201151-91153-01]
RIN 0694-AE66
Issuance of Electronic Document and Related Recordkeeping
Requirements
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Industry and Security (BIS) is proposing to
eliminate the use of most paper documents that it sends to parties
having business before the agency. The documents that would be affected
by this proposed rule are: Export and reexport licenses, notices of
denial of license applications, notices of return of a license
application without action, classification results, License Exception
AGR notification results and encryption review request results. This
proposed rule would modify the Export Administration Regulations (EAR)
to implement those changes. This proposed rule also would make changes
to the recordkeeping requirements associated with the elimination of
paper documents. BIS is proposing to make these changes to reduce
mailing costs and to free up staff time currently devoted to mailing
these documents for use in other tasks.
DATES: Comments must be received by BIS no later than February 2, 2010.
FOR FURTHER INFORMATION CONTACT: Thomas Andrukonis, Office of Exporter
Services, Bureau of Industry and Security, U.S. Department of Commerce
at 202 482 6393 or e-mail [email protected].
SUPPLEMENTARY INFORMATION:
Background
The Bureau of Industry and Security administers an export licensing
program pursuant to the Export Administration Regulations. As part of
this program, BIS issues various documents in response to applications
and notifications submitted to BIS by the public. Those documents
include export licenses, reexport licenses, notice that an export or
reexport license applications has been denied, notice that an export or
reexport license application is being returned to the applicant without
action, responses to License Exception AGR notifications, and notice of
the results of a classification request. Collectively, these documents
are referred to in this preamble as license related documents.
Currently, BIS issues the license related documents in two ways:
Electronically in BIS's Simplified Network Application Processing
Redesign system (SNAP-R) and on paper. Most license related documents
are issued in both electronic and paper form. However, a few documents
are issued only on paper. BIS now proposes to eliminate the paper
version of the license related documents that it currently issues both
electronically in SNAP-R and on paper.
The EAR require that export license applications, reexport license
applications and License Exception AGR notifications, encryption review
requests and classification requests be submitted to BIS electronically
using SNAP-R unless BIS authorizes a paper submission. The license
related documents associated with a SNAP-R submission are issued on
line in SNAP-R where the submitter may view, save or print a copy. In
addition, a paper version of each of those documents is mailed to the
party. BIS does not issue electronic license related documents in
situations in which BIS authorized a paper submission and in situations
in which BIS must reissue the license related documents because it
reopened a matter previously considered to be completed. BIS is not
proposing to stop issuing paper license related documents in these two
situations in which it currently issues only paper documents. BIS also
is not proposing to change its practices regarding issuance of Special
Comprehensive Licenses or Special Iraq Reconstruction Licenses. BIS is
proposing to discontinue issuing paper documents in the situations
where it currently issues both paper and electronic versions of the
license related documents. BIS is also proposing to make certain
changes to the recordkeeping requirements in connection with this
change.
Specific Proposed Changes
Clarification that Electronic Notification in SNAP-R is Considered, for
Purposes of the EAR, Written Notification of the Results of a License
Exception AGR Request
This proposed rule would revise Sec. 740.18(c)(5) to state that
BIS will issue confirmation in SNAP-R or by other written notification
of the decision that no agency has objected to a party's proposed use
of License Exception AGR. Currently, that section merely states that
BIS will issue written confirmation.
Removal of Requirement to Maintain a Log of Electronic Submissions
This proposed rule would remove the requirement currently found in
Sec. 748.7(c) that companies maintain a log of electronic submissions.
The requirement was established in connection with BIS' initial
electronic application process, which was instituted in the 1980s. At
that time, electronic submissions were facilitated by a number of
private sector vendors and the logs may have been necessary for
auditing purposes. However, currently, the information required to be
kept in the log duplicates information that parties are required to
include in their SNAP-R submissions or that is automatically recorded
by SNAP-R. BIS is proposing to discontinue the log keeping requirement
because it is redundant of information available to BIS in SNAP-R. The
proposed rule would accomplish this change by removing paragraph (c) of
Sec. 748.7 and
[[Page 63686]]
redesignating existing paragraph (d) as paragraph (c).
Removal of Language Relating to ``Computer Generated'' Licenses, the
Department of Commerce Seal and Attachments to Licenses
The proposed rule would revise Sec. 750.7(b) to state merely that
BIS may issue export and reexport licenses either electronically or on
paper and that each license will bear a license number. Existing
language regarding ``computer generated'' licenses, the Department of
Commerce seal and attachments to licenses would be removed as would an
explicit requirement that exporters use the license number when
communicating with BIS about the license. The proposed language would
allow BIS to exercise discretion in deciding whether to issue a license
electronically in SNAP-R or on paper. However, BIS expects that it will
issue nearly all licenses electronically. Unless some exceptional
circumstances exist, only licenses for which the applicant was
authorized to file on paper and licenses that BIS cannot issue
electronically (currently, only reopened licenses) will be issued on
paper. BIS is proposing this change to reduce the costs of generating
and mailing paper copies of licenses and to be able to assign to other
tasks staff currently assigned to handling paper licenses. Because no
EAR provision currently addresses issuance of the other license related
documents with the specificity that Sec. 750.7(b) addresses licenses,
only Sec. 750.7(b) need be modified to implement this change. However,
BIS's intent is to issue only the electronic version of all license
related documents unless BIS authorized paper submission of the
original application, notice or request, or BIS cannot issue an
electronic version of the applicable license related documents.
Removal of Requirement To Attach a Replacement License to the Original
This proposed rule would revise Sec. 750.7(h)(4) to remove a
requirement that the license holder attach a replacement license issued
by BIS to the original license that it replaces. That requirement dates
to an era in which electronic licenses did not exist and is impractical
with electronic licenses issued in SNAP-R. The proposed rule would
retain the requirement that the license holder keep both the original
license and the replacement license.
Removal of Requirement To Retain Copies of Documents Submitted to BIS
Via the SNAP-R System
This proposed rule would exempt parties who submit documents to BIS
via BIS's SNAP-R system from requirements to retain copies of documents
so submitted even though those documents are ``export control
documents'' as defined in part 772 of the EAR. BIS believes the
reliability of the SNAP-R system provides adequate assurance that the
documents received by BIS were submitted and that all submitted
documents are received by BIS. This proposed change would not preclude
parties from storing copies of these documents.
Addition of Certain Documents to Recordkeeping Requirements in Part 762
This proposed rule would add the following documents to the list of
documents required to be kept found in Sec. 762.2(a)(10): Notification
from BIS that an application is being returned without action;
Notification from BIS that an application is being denied; Notification
from BIS of the results of a commodity classification or encryption
review request conducted by BIS. BIS believes that requiring recipients
of these documents to retain them is needed to confirm receipt and to
verify that the recipient received notice of the terms of the document.
BIS is not proposing to require parties to retain requests for
additional information concerning active matters that they receive from
BIS.
Application of Original Document Retention Requirement to Documents
Issued in SNAP-R
This proposed rule would state that parties who receive documents
issued by BIS in SNAP-R may store the documents in one of two ways and
that either way would meet the requirement of Sec. 762.5 that original
documents be retained. The two methods are: Storage of complete
documents issued by BIS in SNAP-R electronically in a format readable
by software possessed by the recipient party; or printing out and
storing a complete paper copy of the document. BIS believes that either
method that would be authorized by the proposed changes to Sec. 762.5
would provide an accurate representation of the contents of the record
and, therefore, either method should be treated as the equivalent of an
original document.
Reasons for the Proposed Changes
Under its current procedure, BIS is expending funds and staff time
to mail information to certain parties that is entirely duplicative of
information that BIS sends to the same parties electronically. BIS is
proposing these changes to reduce its operating costs and to free the
staff time currently devoted to mailing paper documents for other
purposes. BIS estimates that it currently spends approximately $25,000
annually in direct mailing costs (envelopes, supplies and postage) to
send out paper copies of the licenses, and responses to classification
requests, encryption review requests and License Exception AGR
notifications. BIS also estimates that about 1.5 hours of staff time is
expended each day in connection with mailing these documents.
Rulemaking Requirements
1. This rule has been determined to be not significant for purposes
of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This regulation contains
a collection previously approved by OMB under control number 0694-0096.
3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
4. The Chief Counsel for Regulations 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 implemented a revised version of its Simplified Network
Applications Processing System (SNAP-R) in October 2006. The SNAP-R
system provides a Web based mechanism for parties to submit license
applications, classification requests, License Exception AGR
notifications and encryption review requests electronically and for BIS
to respond electronically to each matter. In October 2008, BIS made use
of the SNAP-R system mandatory except in five specified circumstances.
SNAP-R is the vehicle through which BIS receives most of the
submissions for which SNAP-R is available.
During the period from January 1, 2009 through May 31, 2009, BIS
[[Page 63687]]
received 11,580 submissions via SNAP-R and 36 submissions via the paper
application forms. Under existing procedures BIS would send the final
results for the 11,580 SNAP-R submissions to the submitting party both
electronically in SNAP-R and on paper. Under this proposed rule, BIS
would send those final results via SNAP-R only. Final responses in the
36 instances in which BIS accepted a paper submission would continue to
receive paper responses under this proposed rule. In addition, during
the period from January 1, 2009 through May 31, 2009, BIS reopened 246
matters relating to submissions affected by this rule that previously
had been considered to be closed. BIS would continue to issue the
documents announcing the decision in these reopened matters on paper
because the SNAP-R system currently is incapable of issuing such
documents.
The parties who currently receive both a SNAP-R and a paper
response may fulfill the EAR recordkeeping requirement for these
documents by either storing the electronic version in appropriate media
or by storing the paper copy. Under the proposed rule parties who store
the electronic document could continue doing so without any change.
Parties who currently store only the paper copy would have to convert
to electronic storage or would have to print out a paper copy of the
electronic document and store that copy.
BIS believes that the burden on parties that would have to change
their procedures would be negligible. Only parties who submitted an
application, notification or request electronically are affected by
this rule. The fact that a party makes an electronic submission is a
good indication that the party is equipped to store incoming documents
electronically. In addition, BIS believes that the burden of printing
out a paper copy of a document and filing it is not substantially
greater than the burden of routing a paper envelope to the proper
person, opening the envelope and filing the contents.
Number of Small Entities
In fiscal year 2008, BIS processed nearly 30,000 transactions that
would be subject to this rule. BIS does not know the number of small
entities that would be affected by this rule. BIS does not know the
size of all of the entities that submit the applications, notifications
and requests to which this rule applies nor does BIS know which such
entities currently utilize paper recordkeeping. However, two of the
criteria under which BIS authorizes paper submissions (lack of access
to the Internet and no more than one submission in the previous twelve
months) are likely to remove the smallest of businesses from the impact
of this rule.
Conclusion
Regardless of the number of entities affected, the burden that
would be imposed by the rule is negligible.
List of Subjects
15 CFR Parts 740, 748 and 750
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
15 CFR Part 762
Administrative practice and procedure, Business and industry,
Confidential business information, Exports, Reporting and recordkeeping
requirements.
Accordingly, the Export Administration Regulations (15 CFR Parts
730-774) are proposed to be amended as follows:
PART 740--[AMENDED]
1. The authority citation for part 740 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
22 U.S.C. 7201 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 13, 2009, 74 FR 41325 (August 14, 2009).
2. Section 740.18 is amended by revising the sixth sentence of
paragraph (c)(5) to read as follows:
Sec. 740.18 Agricultural commodities.
* * * * *
(c) * * *
(5) * * * BIS will issue written confirmation electronically in
SNAP-R or via paper. * * *
* * * * *
PART 748--[AMENDED]
3. 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 13, 2009, 74
FR 41325 (August 14, 2009).
Sec. 748.7 [Amended]
4. Section 748.7 is amended by removing paragraph (c) and
redesignating paragraph (d) as paragraph (c).
PART 750--[AMENDED]
5. The authority citation for part 750 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 13026, 61 FR 58767, 3
CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp.,
p. 783; Presidential Determination 2003-23 of May 7, 2003, 68 FR
26459, May 16, 2003; Notice of August 13, 2009, 74 FR 41325 (August
14, 2009).
6. Section 750.7 is amended by removing the final sentence from
paragraph (a) and by revising paragraph (b) and paragraph (h)(4) to
read as follows:
Sec. 750.7 Issuance of licenses
* * * * *
(b) Issuance of a license. BIS may issue a license electronically
via its Simplified Network Application Processing (SNAP-R) system or
via paper or both electronically and via paper. Each license has a
license number that will be shown on the license.
* * * * *
(h) * * *
(4) Replacement license. If you have been issued a ``replacement
license'' (for changes to your original license not covered in
paragraph (c) of this section), you must retain both the original and
the replacement license.
* * * * *
PART 762--[AMENDED]
7. 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
13, 2009, 74 FR 41325 (August 14, 2009).
8. Section 762.2 is amended by:
a. Revising paragraph (a)(1),
b. Removing the comma and the word ``and'' from the end of
paragraph (a)(9),
c. Inserting a semicolon at the end of paragraph (a)(9),
d. Redesignating paragraph (a)(10) as paragraph (a)(11), and
e. Adding a new paragraph (a)(10) to read as follows:
Sec. 762.2 Records to be retained.
(a) * * *
(1) Export control documents as defined in part 772 of the EAR,
except parties submitting documents electronically to BIS via the SNAP-
R system are not required to retain copies of documents so submitted;
* * *
(10) Notification from BIS of an application being returned without
action; Notification by BIS of an application being denied;
Notification by BIS of the results of a commodity
[[Page 63688]]
classification or encryption review request conducted by BIS; and,
* * * * *
9. Section 762.4 is amended by adding a sentence at the end of the
section to read as follows:
Sec. 762.4 Original records required.
* * * With respect to documents that BIS issues to a party in SNAP-
R, either an electronically stored copy in a format that makes the
document readable with software possessed by that party or a paper
print out of the complete document is deemed to be an original record
for purposes of this paragraph.
Dated: November 30, 2009.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. E9-28982 Filed 12-3-09; 8:45 am]
BILLING CODE 3510-33-P