[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Rules and Regulations]
[Pages 17625-17628]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8593]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
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Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules 
and Regulations

[[Page 17625]]

EXPORT-IMPORT BANK OF THE UNITED STATES

5 CFR Chapter LII

12 CFR Part 400

RIN 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Export-Import Bank of the United States

AGENCY: Export-Import Bank of the United States (Eximbank).

ACTION: Interim rule with request for comments.

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SUMMARY: The Export-Import Bank of the United States, with the 
concurrence of the Office of Government Ethics (OGE), is issuing 
regulations for employees of Eximbank that supplement the Standards of 
Ethical Conduct for Employees of the Executive Branch issued by OGE. 
The supplemental rules prohibit certain Eximbank employees and their 
spouses and minor children from owning securities in any of the 
entities designated as having the most substantial dealings with 
Eximbank and require Eximbank employees, other than special Government 
employees, to obtain prior approval to engage in outside employment.
    Eximbank is also repealing its existing regulations setting forth 
agency standards of ethical conduct which have been substantially 
superseded by the executive branch-wide Standards of Ethical Conduct 
and by the executive branch-wide financial disclosure regulations 
issued by OGE. In place of the existing Eximbank regulations in 12 CFR 
part 400, Eximbank is substituting a cross-reference to the new 
executive branch-wide regulations and to these supplemental 
regulations.

DATES: Interim rule effective April 7, 1995. Comments are invited and 
must be received on or before May 22, 1995.

ADDRESSES: Send comments to the Export-Import Bank of the United 
States, 811 Vermont Avenue NW., Washington, DC 20571, Attention: Mr. 
Paul W. Boyer.

FOR FURTHER INFORMATION CONTACT: Mr. Robert J. McKinsey, Export-Import 
Bank of the United States, Office of The General Counsel, telephone 
(202) 565-3452.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 7, 1992, OGE published a final rule entitled ``Standards 
of Ethical Conduct for Employees of the Executive Branch'' (Standards). 
See 57 FR 35006-35067, as corrected at 57 FR 48557 and 57 FR 52583, 
with additional grace period extensions at 59 FR 4779-4780 and 60 FR 
6390-6391. The Standards, codified at 5 CFR part 2635 and effective 
February 3, 1993, establish uniform standards of ethical conduct that 
are applicable to all executive branch personnel.
    5 CFR 2635.105 authorizes an executive branch agency to issue, with 
OGE's concurrence, agency-specific supplemental regulations that are 
necessary to implement effectively its ethics program. Eximbank, with 
OGE's concurrence, has determined that the following supplemental 
rules, being codified in new 5 CFR chapter LII, are necessary for the 
successful implementation of Eximbank's ethics program, in light of 
Eximbank's operations.

II. Analysis of the Regulations

Section 6201.101  General

    Section 6201.101 explains that the regulations contained in the 
interim rule apply to employees of Eximbank and are supplemental to the 
executive branch standards.

Section 6201.102  Prohibited Financial Interests

    The Standards, at 5 CFR 2635.403(a), specifically recognize that an 
individual agency may find it necessary or desirable to issue a 
supplemental regulation prohibiting or restricting the acquisition or 
holding of a financial interest or a class of financial interests by 
its employees, or any category of its employees, and the spouses and 
minor children of those employees, based on the agency's determination 
that the acquisition or holding of such financial interests would cause 
a reasonable person to question the impartiality and objectivity with 
which agency programs are administered. Eximbank has made such a 
determination with respect to certain holdings by those employees, 
other than special Government employees, who are required to file 
public or confidential disclosure statements. With respect to the 
spouses and minor children of these Eximbank employees, Eximbank has 
made an additional determination that there is a direct and appropriate 
nexus between the prohibition on holding certain financial interests as 
applied to spouses and minor children and the efficiency of the service 
provided by Eximbank. To help ensure public confidence in the integrity 
of Eximbank's programs and operations, this interim rule, for 
codification at 5 CFR 6201.102, will prohibit covered employees of 
Eximbank and their spouses and minor children from owning securities of 
any of the entities designated by Eximbank as having the most 
substantial dealings with Eximbank.
Section 6201.103  Prior Approval of Outside Employment

    The Standards, at 5 CFR 2635.803, also specifically recognize that 
an agency may find it necessary or desirable to issue a supplemental 
regulation requiring its employees to obtain approval before engaging 
in outside employment or activities. The Eximbank standards of conduct 
regulations have long required employees to obtain written permission 
prior to engaging in outside employment. Eximbank has found this 
requirement useful in ensuring that the outside employment activities 
of employees conform with all applicable laws and regulations. In 
accordance with 5 CFR 2635.803, Eximbank has determined that it is 
necessary to the administration of its ethics program to continue to 
require such prior approval. This interim rule, for codification at 5 
CFR 6201.103, will require employees of Eximbank, other than special 
Government employees, who desire to engage in outside employment to 
obtain prior approval of such employment from their immediate 
supervisor and from Eximbank's Designated Agency Ethics Official. 
[[Page 17626]] 

Repeal of Eximbank Standards of Conduct

    Eximbank is repealing its existing standards of ethical conduct 
regulations codified at 12 CFR part 400 which have been largely 
superseded by the executive branch-wide Standards at 5 CFR part 2635 or 
the executive branch financial disclosure regulations at 5 CFR part 
2634. In place of its old standards at 12 CFR part 400, Eximbank is 
issuing a residual cross-reference provision at new 12 CFR 400.101 to 
refer both to the executive branch-wide Standards and financial 
disclosure regulations and to Eximbank's new supplemental standards 
regulations.

II. Matters of Regulatory Procedure

Administrative Procedure Act

    As General Counsel of Eximbank, I have found good cause pursuant to 
5 U.S.C. 553(b) and (d)(3) for waiving, as unnecessary and contrary to 
the public interest, the general notice of proposed rulemaking and the 
30-day delay in effectiveness as to these interim rules and repeals. 
The reason for this determination is that it is important to a smooth 
transition from Eximbank's prior ethics rules to the new executive 
branch-wide Standards and financial disclosure regulations that these 
rulemaking actions become effective as soon as possible. Furthermore, 
this rulemaking is related to Eximbank organization, procedure and 
practice. Nonetheless, this is an interim rulemaking, with provision 
for a 45-day public comment period. The Export-Import Bank of the 
United States will review all comments received during the comment 
period and will consider any modifications that appear appropriate in 
adopting these rules as final, with the concurrence of the Office of 
Government Ethics.

Regulatory Flexibility Act

    As General Counsel of Eximbank, I have determined under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) that these regulations 
will not have a significant impact on small business entities because 
they affect only Eximbank employees and their immediate families.

Paperwork Reduction Act

    As General Counsel of Eximbank, I have determined that the 
Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply because 
these regulations do not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget.

List of Subjects

5 CFR Part 6201

    Conflict of interests, Government employees.

12 CFR Part 400

    Conflict of interests, Government employees.

    Dated: March 1, 1995.
Carol F. Lee,
General Counsel, Export-Import Bank of the United States.

    Approved: March 15, 1995.
Stephen D. Potts,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Export-Import Bank 
of the United States, in concurrence with the Office of Government 
Ethics, is amending title 5 of the Code of Federal Regulations and 
title 12, chapter IV, of the Code of Federal Regulations as follows:
    1. A new Chapter LII, consisting of part 6201, is added to title 5 
of the Code of Federal Regulations to read as follows:
5 CFR CHAPTER LII--EXPORT-IMPORT BANK OF THE UNITED STATES

PART 6201--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE EXPORT-IMPORT BANK OF THE UNITED STATES

Sec.
6201.101  General.
6201.102  Prohibited financial interests.
6201.103  Prior approval for outside employment.

    Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government 
Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5 
CFR 2635.105, 2635.403(a), 2635.803.
Sec. 6201.101  General.

    In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Export-Import Bank of the United States 
(Bank) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635. In addition to the 
standards in 5 CFR part 2635 and this part, employees of the Bank are 
subject to the executive branch financial disclosure regulations 
contained in 5 CFR part 2634.


Sec. 6201.102  Prohibited financial interests.

    (a) Prohibition. Except as provided in paragraph (f) of this 
section, no covered employee or covered family member shall own 
securities issued by an exporter or lending institution appearing on 
the List of Designated Entities under paragraph (b) of this section.
    (b) List of Designated Entities--(1) Compilation of list of 
designated entities. Once each fiscal year, the designated agency 
ethics official (DAEO) shall compile a List of Designated Entities 
based upon the following criteria:
    (i) All exporters that, during the preceding two fiscal years, 
exported an aggregate dollar volume of goods and services supported by 
the Bank in excess of four hundred million dollars ($400,000,000);
    (ii) All exporters that, during the preceding two fiscal years, had 
seven (7) or more aggregate export transactions supported by the Bank;
    (iii) All lending institutions that, during the preceding two 
fiscal years, financed an aggregate dollar volume of export 
transactions supported by the Bank in excess of one hundred fifty 
million dollars ($150,000,000); and
    (iv) All lending institutions that, during the preceding two fiscal 
years, financed twenty (20) or more aggregate export transactions 
supported by the Bank.
    (2) Distribution of list of designated entities. The DAEO shall 
distribute the List of Designated Entities to all covered employees 
promptly after it is compiled, and shall ensure that each new covered 
employee receives a copy of the current List of Designated Entities 
promptly after becoming a covered employee.
    (c) Definitions. For purposes of this section:
    (1) Covered employee means an employee of the Bank, other than a 
special Government employee, who is required to file a public or a 
confidential financial disclosure report (Form SF 278 or SF 450) under 
5 CFR part 2634.
    (2) Covered family member means the spouse or minor child of a 
covered employee.
    (3) Securities means all financial interests evidenced by debt or 
equity instruments. The term includes, without limitation, bonds, 
debentures, notes, securitized assets and commercial paper, as well as 
all types of preferred and common stock. The term encompasses both 
present and contingent ownership interests, including any beneficial or 
legal interest derived from a trust. It extends to any right to acquire 
or dispose of any long or short position in such securities and 
includes, without limitation, interests convertible into such 
securities, as well as options, rights, warrants, puts, calls, and 
straddles with respect thereto. It does not include: [[Page 17627]] 
    (i) An investment in a publicly traded or publicly available mutual 
fund or other collective investment fund or in a widely held pension or 
similar fund, provided that the fund does not invest more than ten 
percent (10%) of the value of its portfolio in securities of any one 
entity on the List of Designated Entities and the covered employee or 
covered family member neither exercises control over nor has the 
ability to exercise control over the financial interests held in the 
fund; or

    (ii) Certificates of deposit, checking accounts, savings accounts 
and other deposit accounts.

    (4) Support by the Bank means:

    (i) Direct loans made by the Bank;

    (ii) Guarantees by the Bank of loans from lending institutions; or

    (iii) Insurance policies issued by the Bank under any of its 
insurance programs.

    (d) Restrictions arising from third party relationships. If a 
covered employee has knowledge that any of the entities described in 
paragraphs (d)(1) through (d)(6) of this section own any security that 
a covered employee or covered family member would be prohibited from 
owning by paragraph (a) of this section, the covered employee shall 
promptly report such interests to the DAEO. The DAEO may require the 
covered employee to terminate the third party relationship, undertake 
an appropriate disqualification, or take other appropriate action 
necessary, under the particular circumstances, to avoid a statutory 
violation or a violation of part 2635 of this title or of this part, 
including an appearance of misuse of position or loss of impartiality. 
This paragraph applies to any:

    (1) Partnership in which the covered employee or covered family 
member is a general partner;

    (2) Partnership in which the covered employee and/or covered family 
member(s) in the aggregate holds more than a ten percent limited 
partnership interest;

    (3) Closely held corporation in which the covered employee and/or 
covered family member(s) in the aggregate holds more than a ten percent 
(10%) equity interest;

    (4) Trust in which the covered employee or covered family member 
has a legal or beneficial interest;

    (5) Investment club or similar informal investment arrangement 
between the covered employee or covered family member and others; or

    (6) Other entity if the covered employee and/or covered family 
member(s) in the aggregate holds more than a ten percent (10%) equity 
interest.

    (e) Period to Divest. Unless a waiver is granted pursuant to 
paragraph (f) of this section, a covered employee or covered family 
member who owns securities of a designated entity as of the date that 
the initial List of Designated Entities is circulated to covered 
employees, the date that a revised List of Designated Entities is 
circulated to covered employees, or the first day that an individual 
becomes a covered employee, shall divest the securities within six (6) 
months of such date. The DAEO may, in certain cases of unusual 
hardship, grant a written extension of up to an additional six (6) 
months within which a covered employee or covered family member must 
divest securities of a designated entity. Notwithstanding the grant of 
an extension, a covered employee remains subject to the 
disqualification requirements of 5 CFR 2635.402 and 2635.502. A covered 
employee or covered family member who must divest securities pursuant 
to this section should refer to section 1043 of the Internal Revenue 
Code and to the regulations of subpart J of 5 CFR part 2634 under which 
the covered employee or covered family member may be eligible to defer 
the recognition of taxable gain on the sale or other divestiture.

    (f) Waivers. The DAEO may grant a written waiver from the 
securities prohibition contained in this section based on a 
determination that the waiver is not inconsistent with 5 CFR part 2635 
or otherwise prohibited by law and that, under the particular 
circumstances, application of the prohibition is not necessary to avoid 
the appearance of misuse of position or loss of impartiality, or 
otherwise to ensure confidence in the impartiality and objectivity with 
which Bank programs are administered. A waiver under this paragraph may 
be accompanied by appropriate conditions, such as requiring execution 
of a written statement of disqualification. Notwithstanding the grant 
of any waiver, a covered employee remains subject to the 
disqualification requirements of 5 CFR 2635.402 and 2635.502.

    (g) Agency determinations of substantial conflict. Nothing in this 
section prevents the Bank from prohibiting or restricting an individual 
Bank employee from acquiring or holding a financial interest or a class 
of financial interests based upon the Bank's determination of 
substantial conflict pursuant to 5 CFR 2635.403(b).

Sec. 6201.103  Prior approval for outside employment.

    (a) Prior approval requirement. Before engaging in any outside 
employment, whether or not for compensation, an employee, other than a 
special Government employee, must obtain the written approval of the 
employee's immediate supervisor and the DAEO. Requests for approval 
shall be forwarded through normal supervisory channels to the DAEO and 
shall include the name of the person, group, or organization for whom 
the work is to be performed; the type of work to be performed; and the 
proposed hours of work and approximate dates of employment.

    (b) Standard for approval. Approval shall be granted only upon a 
determination that the outside employment is not expected to involve 
conduct prohibited by statute or Federal regulation (including 5 CFR 
part 2635). In the case of an employee who wishes to practice a 
profession involving a fiduciary relationship, as defined in 5 CFR 
2636.305(b), approval will be granted only for each individual matter 
in the course of practicing such profession.

    (c) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship involving the provision of personal services by the 
employee. It includes but is not limited to personal services as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, trustee or teacher. It also includes writing when done 
under an arrangement with another person for production or publication 
of the written product. It does not, however, include participation in 
the activities of a nonprofit charitable, religious, professional, 
social, fraternal, educational, recreational, public service or civic 
organization, unless such activities involve the provision of 
professional services or advice or are for compensation other than 
reimbursement of expenses.

12 CFR CHAPTER IV--EXPORT-IMPORT BANK OF THE UNITED STATES

    2. Part 400 of 12 CFR chapter IV is revised to read as follows: 
[[Page 17628]] 

PART 400--EMPLOYEE FINANCIAL DISCLOSURE AND ETHICAL CONDUCT 
STANDARDS REGULATIONS


Sec. 400.101  Cross-reference to employee financial disclosure and 
ethical conduct standards regulations.

    Employees of the Export-Import Bank of the United States (Bank) 
should refer to:
    (a) The executive branch-wide financial disclosure regulations at 5 
CFR part 2634;
    (b) The executive branch-wide Standards of Ethical Conduct at 5 CFR 
part 2635; and
    (c) The Bank regulations at 5 CFR part 6201 which supplement the 
executive branch-wide standards.

    Authority: 5 U.S.C. 7301.

[FR Doc. 95-8593 Filed 4-6-95; 8:45 am]
BILLING CODE 6690-01-P