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Bureau of Industry and Security, Commerce.
Notice of inquiry.
The Bureau of Industry and Security (BIS), Department of Commerce, is currently engaged in the Export Control Reform Initiative, which will fundamentally reform the U.S. export control system. Retrospective review of the regulations administered by BIS is an essential aspect of the Export Control Reform Initiative. In addition to this effort, and pursuant to President Obama's direction in Executive Order 13563, BIS is conducting a retrospective review of portions of the Export Administration Regulations, Chemical Weapons Convention Regulations, Additional Protocol Regulations, and National Defense Industrial Base Regulations to determine how they might be clarified or streamlined to be more effective or less burdensome. Through this notice of inquiry, BIS seeks public comments on how it should undertake its retrospective review of regulations.
Comments must be received by BIS no later than February 1, 2012.
Comments may be submitted to the Federal rulemaking portal (http://www.regulations.gov). The regulations.gov ID for this notice of inquiry is: BIS-2011-0027. In order to maximize the open exchange of ideas, BIS strongly encourages comment submission through regulations.gov. However, comments may also be submitted via e-mail to email@example.com or on paper to Regulatory Policy Division, Bureau of Industry and Security, Room 2099B, U.S. Department of Commerce, Washington, DC 20230. Please refer to RIN 0694-XA37 in all comments and in the subject line of e-mail comments. All comments (including any personally identifying information) will be made available for public inspection and copying.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Hillary Hess, Director, Regulatory Policy Division, Office of Exporter Services, Bureau of Industry and Security at 202-482-2440 or firstname.lastname@example.org.End Further Info End Preamble Start Supplemental Information
On January 18, 2011, President Barack Obama issued Executive Order 13563, affirming general principles of regulation and directing government agencies to improve regulation and regulatory review. Among other things, the President stressed the need for the regulatory system to allow for public participation and an open exchange of ideas, as well as promote predictability and reduce uncertainty. The President also emphasized that regulations must be accessible, consistent, written in plain language, and easy to understand. As part of its ongoing effort to ensure that its regulations are clear, effective, and up-to-date, BIS is issuing this notice of inquiry soliciting public comments on its existing and proposed rules, with the exception of those rules related to the Export Control Reform Initiative, as described below. BIS requests that comments on rules related to export control reform be submitted in response to those specific rules and notices rather than to this broader notice of inquiry, which pertains to other aspects of the Export Administration Regulations and to the Chemical Weapons Convention Regulations, the Additional Protocol Regulations, and National Security Industrial Base Regulations.
The Export Control Reform Initiative
In August 2009, the President directed a broad-based interagency review of the U.S. export control system with the goal Start Printed Page 47528of strengthening national security and the competitiveness of key U.S. manufacturing and technology sectors by focusing on current threats and adapting to the changing economic and technological landscape. The review determined that the current export control system is overly complicated, contains too many redundancies, and, in trying to protect too much, diminishes our ability to focus our efforts on the most critical national security priorities. As a result, the Administration began the Export Control Reform Initiative, which will fundamentally reform the U.S. export control system. The Export Control Reform Initiative is designed to enhance U.S. national security and strengthen the United States' ability to counter threats such as the proliferation of weapons of mass destruction. The Administration determined that fundamental reform is needed in each of the export control system's four component areas: transformation to a single control list, a single licensing agency, a single information technology system, and a single primary enforcement coordination agency. The Administration is implementing the reform in three phases. The first two phases involve short- and medium-term adjustments to the current export control system, with a focus on establishing harmonized control lists and processes among the Departments of Commerce, State, and the Treasury, to the extent practicable, in order to build toward the third phase of the single control list, licensing agency, information technology system, and enforcement coordination agency. Under this approach, new criteria for determining what items need to be controlled and a common set of policies for determining when an export license is required will be implemented. The control list criteria will be based on transparent rules, which will reduce the uncertainty faced by our allies, U.S. industry, and its foreign partners, and will allow the government to erect higher walls around the most sensitive items in order to enhance national security.
On December 9, 2010, BIS issued a proposed rule (75 FR 76653) describing the proposed new License Exception Strategic Trade Authorization (STA) that will be an initial step in the Export Control Reform Initiative. License Exception STA will authorize, with conditions, the export, reexport and transfer (in-country) of specified items to destinations that pose relatively low risk of unauthorized uses. To safeguard against reexports to destinations that are not authorized under License Exception STA, it will impose notification and consignee statement requirements on these transactions. Also on December 9, BIS issued an Advance Notice of Proposed Rulemaking (75 FR 76664) soliciting public comments on how the descriptions of items on the Commerce Control List (CCL) could be clarified and made more “positive” in the sense of using objective parameters rather than subjective criteria to determine the items' classifications, which in turn determine license requirements. This notice also sought public comments on “tiering” items in a manner consistent with the control criteria the Administration has developed as part of the reform effort: The degree to which an item provides the United States with a critical, substantial, or significant military or intelligence advantage; and the availability of that item outside certain groups of countries. The Department of State's Directorate of Defense Trade Controls published requests for comment on revisions to the U.S. Munitions List on December 10, 2010 (75 FR 76930).
BIS received numerous comments on the proposed License Exception STA and the CCL notice, most of them detailed, thoughtful, and technically expert. BIS issued the final rule implementing License Exception STA on June 16, 2011 (76FR 35276) having benefited significantly from such public participation, and anticipates that the continuing effort to coordinate, simplify, and harmonize export controls across agencies will be similarly informed by public response to the notice.
A core proposal intended to bring about the initiative's national security objectives is to transfer jurisdiction over less significant defense articles, principally generic parts and components, that are controlled by the regulations administered by the State Department to the export control regulations administered by the Commerce Department, which are more capable of having controls tailored to the significance of the item and the degree of risk associated with its export to different groups of countries. This plan will advance the national security objectives of export control reform by allowing for greater interoperability with our NATO partners and other close allies and also will strengthen the industrial base by removing incentives for foreign companies to design out or avoid US-origin content. This plan will also significantly reduce the licensing and other collateral burdens on exporters and the government while at the same time harmonizing the system to allow for the eventual creation of a single list of controlled items administered by a single licensing agency. (See “Proposed Revisions to the Export Administration Regulations (EAR): Control of Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML),” published on July 15, 2011 (76 FR 41958).)
In the coming months, the agencies involved in the Export Control Reform Initiative will continue the regulatory modifications necessary to harmonize export control lists and definitions, which will involve issuing a number of proposals. This effort will draw heavily on the resources of those agencies, but it will require the efforts of members of the public as well, who take time from their normal duties to review proposals and submit comments.
Export Administration Regulations
The Export Control Reform Initiative is BIS's top priority, and as noted above, BIS requests that submission of reform-related comments be directed toward each specific proposal as it is published rather than as part of a general response to this notice of inquiry. Many key aspects of the EAR—which items are subject to the EAR and when they require licenses to which destination—will be addressed substantively by the Export Control Reform Initiative. In this notice of inquiry, BIS seeks comments on aspects of the EAR that are not immediately affected by the reform initiative and that could be clarified or streamlined to be more effective or less burdensome.
Controls imposed by the EAR protect the national security and advance the foreign policy interests of the United States, creating a necessary licensing burden. This necessary licensing burden entails an equally necessary compliance burden. BIS seeks comments identifying any unnecessary compliance burden caused by rules that are unduly complex, outmoded, inconsistent, or overlapping, and comments identifying ways to make any aspect of the EAR more effectively protect the national security or advance the foreign policy interests of the United States.
Chemical Weapons Convention Regulations
The Chemical Weapons Convention Regulations (15 CFR parts 710 through 729) (CWCR) implement certain obligations of the United States under the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction, known as the CWC or Convention.Start Printed Page 47529
Additional Protocol Regulations
The Additional Protocol Regulations (15 CFR parts 781 through 786) (APR) implement certain obligations of the United States under the Protocol Additional to the Agreement Between the United States of America and the International Atomic Energy Agency Concerning the Application of Safeguards in the United States of America, known as the Additional Protocol. These obligations relate to nuclear fuel cycle-related activities.
National Security Industrial Base Regulations
The National Security Industrial Base Regulations (15 CFR 700 through 705) include the Defense Priorities and Allocations System, Reporting of Offsets Agreements in Sales of Weapon Systems or Defense-Related Items to Foreign Countries or Foreign Firms, and Effect of Imported Articles on the National Security. Because the rules regarding reporting of offsets agreements were recently revised (74 FR 68136), BIS is not soliciting comments on 15 CFR part 701 with this notice of inquiry. BIS also published a proposed rule regarding the Defense Priorities and Allocations System Regulations (75 FR 32122) and has yet to publish a final rule. BIS is not soliciting comments on 15 CFR part 700 with this notice of inquiry.
With respect to improving existing rules or eliminating outmoded ones, BIS would like to receive comments that are as specific and well-supported as possible. Helpful comments will include a description of a problem or concern, available data on cost or economic impact, and a proposed solution. BIS also welcomes comments on rules the public considers effective or well designed. BIS is also interested in information on foreign countries' implementation of export controls. In the interest of fostering open exchange, BIS encourages those interested in submitting comments to peruse those already posted on regulations.gov.Start Signature
Dated: August 1, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-19947 Filed 8-4-11; 8:45 am]
BILLING CODE 3510-33-P