[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Rules and Regulations]
[Pages 50538-50581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24105]



[[Page 50537]]


_______________________________________________________________________

Part II





Department of Commerce





_______________________________________________________________________



National Institute of Standards and Technology



_______________________________________________________________________



15 CFR Part 280



Fastener Quality Act Implementation Procedures; Final Rule; 
Accreditation Body Evaluation and NIST Fastener Laboratory 
Accreditation Programs and Consensus Standards Organization Under the 
Fastener Quality Act; Notices

  Federal Register / Vol. 61, No. 188 / Thursday, September 26, 1996 / 
Rules and Regulations  

[[Page 50538]]



DEPARTMENT OF COMMERCE

National Institute of Standards and Technology

15 CFR Part 280

[Docket No: 960726209-6209-01]
RIN 0693-AA90


Procedures for Implementation of the Fastener Quality Act

AGENCY: National Institute of Standards and Technology, Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The National Institute of Standards and Technology (NIST) is 
today issuing a final rule to implement the Fastener Quality Act (the 
Act). The Act protects the public safety by: Requiring that certain 
fasteners which are sold in commerce conform to the specifications to 
which they are represented to be manufactured, providing for 
accreditation of laboratories engaged in fastener testing; and 
requiring inspection, testing and certification, in accordance with 
standardized methods, of fasteners covered by the Act.
    The Secretary of Commerce, acting through the Director of the 
National Institute of Standards and Technology (NIST), is implementing 
the Act by establishing these procedures, under which: Laboratories in 
compliance with the Act may be listed; laboratories may apply to NIST 
for accreditation; private laboratory accreditation entities (bodies) 
may apply to NIST for approval to accredit laboratories; and foreign 
laboratories accredited by their governments or by organizations 
recognized by the NIST Director under section 6(a)(1)(C) of the Act can 
be deemed to satisfy the laboratory accreditation requirements of the 
Act. The regulation also establishes, within the Patent and Trademark 
Office (PTO), a recordation system to identify the manufacturers or 
distributors of covered fasteners to ensure that the fasteners may be 
traced to their manufacturers or private label distributors. In 
addition, the regulations contain provisions on enforcement, civil 
penalties, and hearing and appeal procedures.

DATES: This rule is effective November 25, 1996.

FOR FURTHER INFORMATION CONTACT: For subpart A: Dr. Subhas Malghan, FQA 
Program Manager, Technology Services, National Institute of Standards 
and Technology, Building 820, Room 311, Gaithersburg, MD 20899, 
telephone number (301) 975-4510; for subparts B and C: James L. Cigler, 
Chief, National Voluntary Laboratory Accreditation Program, NIST, (301) 
975-4171; for subparts D, E, and F: Robert L. Gladhill, Global 
Standards Policy Program, NIST, (301) 975-4273; for subpart G: William 
H. Arvin, Special Assistant to the Assistant Secretary for Export 
Enforcement, (202) 482-1564; and for subpart H: Lizbeth Kulick, 
Trademark Legal Administrator, Patent and Trademark Office, (703) 308-
8900.

SUPPLEMENTARY INFORMATION:
    As required by section 13 of the Fastener Quality Act (the Act), 
the National Institute of Standards and Technology (NIST) is today 
issuing a final rule to implement that Act. The Act protects the public 
safety by: (1) Requiring that certain fasteners which are sold in 
commerce conform to the specifications to which they are represented to 
be manufactured, (2) providing for accreditation of laboratories 
engaged in fastener testing; and (3) requiring inspection, testing and 
certification, in accordance with standardized methods, of fasteners 
covered by the Act.
    The Secretary of Commerce, acting through NIST, is implementing the 
Act by establishing these procedures, under which: (1) Laboratories in 
compliance with the Act may be listed; (2) laboratories may apply to 
NIST for accreditation; (3) private laboratory accreditation entities 
(bodies) may apply to NIST for approval to accredit laboratories; and 
(4) foreign laboratories accredited by their governments or by 
organizations recognized by the NIST Director under section 6(a)(1)(C) 
of the Act can be deemed to satisfy the laboratory accreditation 
requirements of the Act. The regulation also establishes, within the 
Patent and Trademark Office (PTO), a recordation system to identify the 
manufacturers or distributors of covered fasteners to ensure that the 
fasteners may be traced to their manufacturers or private label 
distributors. In addition, the regulations contain provisions on 
enforcement, civil penalties, and hearing and appeal procedures which 
are administered by the Bureau of Export Administration.
    Subpart A--``General'' sets out the purpose of the rule, and 
presents a general description of the rule. It also contains 
definitions that apply throughout the rule and establishes specific 
requirements with respect to applicable provisions of the Act.
    Subpart B--``Laboratory Accreditation'' provides that all 
laboratories that desire to engage in fastener testing covered by the 
Act and its implementing regulations must be listed by NIST in the 
``Accredited Laboratory List'' established by this subpart. NIST will 
prepare and maintain the List, which shall be composed of all 
laboratories currently accredited under subparts C, D, and E of these 
regulations. Only laboratory test reports prepared by an accredited 
laboratory currently listed in the Accredited Laboratory List shall be 
deemed to meet the requirements of the Act. Procedures for removing a 
fastener testing laboratory from listing and for appeals of listing 
decisions are also included.
    Subpart C--``NIST Fastener Laboratory Accreditation Procedures,'' 
sets out the procedures and technical requirements of the National 
Voluntary Laboratory Accreditation Program (NVLAP) Fasteners Testing 
Program. These procedures are in conformance with ISO/IEC Guide 25-
1990, ``General Requirements for the Competence of Calibration and 
Testing Laboratories.''
    Subpart D--``NIST Approval of Private Accreditation Programs'' 
governs NIST approval of accreditation programs operated by private 
entities. All private accreditation entities that seek to accredit 
fastener testing laboratories must receive recognition under this 
subpart. Revocation procedures of such approval are also covered in 
subpart D.
    Subpart E--``Recognition of Accreditation Programs,'' in accordance 
with section 6(a)(1)(C) of the Act, sets forth the conditions under 
which the accreditation of foreign laboratories by their governments or 
by organizations recognized by the Director shall be deemed to meet the 
requirements of section 7 of the Act.
    Subpart F--``Requirements for Fastener Laboratory Accreditation 
Bodies'' sets out requirements that must be met by all accreditation 
bodies approved by NIST under subpart D and recognized under subpart E. 
These requirements, based on ISO/IEC Guide 58, are intended to assure 
that the approved laboratory accreditation body has the administrative 
and technical capability to conduct a fastener accreditation program 
which meets all the requirements of the Act. Subpart F also sets out 
the requirements against which an approved accreditation body assesses 
the technical competence of an applicant's testing laboratory. These 
requirements are consistent with those contained in subpart C of the 
regulations and all technical requirements established under that 
subpart.
    Subpart G--``Enforcement'' sets forth the procedures governing the 
Commerce Department's administrative procedures for assessment of civil 
penalties and remedies.

[[Page 50539]]

    Subpart H--``Recordal of Insignia'' contains the conditions and 
procedures for manufacturers'' insignias to be recorded by the Patent 
and Trademark Office (PTO). The purpose of Section 8 of the Act is to 
ensure that fasteners may be traced. The Act effects this purpose by 
requiring manufacturers, private label distributors, and persons who 
significantly alter fasteners, as defined by the Act, to inscribe any 
fastener, required by the standards and specifications to which it was 
manufactured to bear a raised or depressed insignia identifying its 
manufacturer, private label distributor, or alterer, with insignias 
that can be used to trace the fastener to its original manufacturer, 
private label distributor, or person who significantly altered the 
fastener. However, the Act does not establish any particular 
recordation system to effect that purpose. The PTO was charged with 
establishing such a system.

Background--Part 1: Summary of the Comment Process from August 1992 
Issuance of the Draft Rule and Discussion of the Subsequent Actions 
That Lead to the Amendment of the Fastener Quality Act (Pub. L. 101-
592)

    On August 17, 1992, NIST published a proposed rule to implement the 
Fastener Quality Act in the Federal Register (57 FR 37032). In response 
to its request for public comments on the proposed regulation, NIST 
received 308 letters. An even 50 percent of the comments, 154, were 
submitted by representatives of businesses that distribute fasteners, 
and another 69 comments, or 22.4 percent, were submitted by fastener 
manufacturers. The remainder of the comments were distributed among 
representatives of trade associations: 22 comments received, or 7.1 
percent of the total; commenters who identified themselves as users of 
fasteners covered by the Act: 16 comments received, or 5.1 percent of 
the total; members of the NIST Fastener Advisory Committee: 8 comments 
received, or 2.5 percent of the total; representatives of fastener 
testing laboratories: 7 comments received, or 2.2 percent of the total; 
and 8 letters, or 2.5 percent, were from governmental officials, 
including one United States Senator, four agencies of the United States 
Government, one state government, and two foreign governments. The 
remaining 24 letters, or 8.2 percent, were from individuals or were not 
otherwise identifiable as belonging to any group.
    The subjects raised by the comments touched on a number of topics, 
including some 225 letters that supported legislative changes to the 
Fastener Quality Act that had been recommended by a NIST advisory 
committee to reduce the cost to the fastener industry of implementing 
the Act. In addition, NIST received letters on many topics directly 
involving the language of the regulation, such as the need to refine 
certain definitions, suggested changes to the procedures governing the 
NIST Fastener Laboratory Accreditation Program, suggested changes to 
sections of the regulation pertaining to the approval and recognition 
by NIST of third parties for the purpose of accrediting fastener 
testing laboratories, and other matters. Finally, NIST received a 
number of comments on the draft Regulatory Impact Analysis.
    The legislative changes recommended by the advisory committee and 
supported by the public comments included the following five changes to 
the Fastener Quality Act:
    * To permit tests of either chemical composition of fasteners to be 
carried out upon raw materials or finished fasteners. The effect of 
this proposed change would be to greatly reduce the number of tests 
needed to verify the chemical composition of fasteners, since many lots 
of fasteners are usually manufactured from one ``mill heat.''
    * To permit the sale of fasteners which, upon testing under the 
Act, are found to have ``minor'' flaws resulting in the fastener not 
conforming to the tolerances stated in the standards and specifications 
to which they were manufactured. Section 5(a) of the Act expressly 
prohibited the sale of fasteners which (1) do not conform to the 
standards and specifications to which they were manufactured, and (2) 
have not been inspected, tested and certified as provided under the 
Act. The Committee felt that many lots of fasteners that could not be 
sold under the Act as presently written could be sold, were this 
amendment enacted, thus reducing manufacturer costs.
    * To permit distributors to commingle fasteners from more than one 
lot in the same container, thus reducing warehouse costs for the 
distributors, despite the provisions of section 7(e) of the Act.
    * To require that any person who significantly alters a fastener be 
responsible for retesting that fastener, despite the provisions of 
section 7(d) of the Act. And,
    * To restrict the availability of test reports to the original 
purchaser despite the requirements of section 10 of the Act that such 
reports be made available to all subsequent purchasers.
    A Hearing before the Subcommittee on Science, Technology, and Space 
of the Committee on Commerce, Science, and Transportation, United 
States Senate, was held in July 1993 to receive testimony from NIST and 
from the fastener industry on the need for amendments to the 1990 Act. 
Amendments addressing the issues raised by NIST and the Committee were 
introduced in the 102nd Congress and were passed by the U.S. House of 
Representatives as part of the National Competitiveness Act of 1994 
(H.R. 820). The U.S. Senate passed a slightly different version of the 
same bill (S.4). However, the bills did not emerge from the House/
Senate Conference before the 102nd Congress adjourned.
    In October 1994 the Industrial Fasteners Institute (IFI), the 
National Fastener Distributors Association (NFDA), and the Fastener 
Industry Coalition (FIC) formed a bipartisan task force composed of 
nine members, nominated from the three organizations, to forge an 
industry strategy regarding amendments to the Fastener Quality Act. In 
January 1995, the Public Law Task Force (PLTF) submitted its report and 
recommendations to Senator Conrad Burns, Chairman, Subcommittee on 
Science, Technology and Space, U.S. Senate, and to Congressman Robert 
Walker, Chairman, Science Committee, U.S. House of Representatives. At 
the request of Senator Burns and Congressman Walker, the Advisory 
Committee reviewed the Task Force's report and recommendations and 
found them to be consistent with the Committee's recommendations for 
amending the Act that were transmitted to NIST and to Congress in 1993. 
The Task Force submitted recommendations to Congress for further 
simplification and clarification of the Act in early June 1995. Joint 
recommendations for amendments from the Fastener Advisory Committee and 
the Public Law Task Force were included in legislation introduced as HR 
2196 in the U.S. House of Representatives and as S.1164 in the U.S. 
Senate. A compromise version was passed in February 1996 as the 
National Technology Transfer and Advancement Act, and signed into law 
by President Clinton in March 1996 as Pub L. 104-113.

Background--Part 2: Summary of the Fastener Quality Act and Amendments 
to the Act as Part of Pub L. 104-113

    The Fastener Quality Act requires that certain fasteners sold in 
commerce conform to the specifications to which they are represented to 
be manufactured; provides for accreditation of laboratories engaged in

[[Page 50540]]

fastener testing; and requires the inspection, testing and 
certification (in accordance with standardized methods) of fasteners 
covered by the Act.
    Section 2 of the Act sets out the findings of Congress with respect 
to the Act. Section (a)(4) was deleted, and in section(b) the 
references to fasteners used in ``critical applications'' were deleted. 
These changes are consistent with the deletion of section 4 of the Act, 
assigning the Secretary of Commerce responsibility to determine 
categories of fasteners used in ``critical applications'' for purposes 
of adding or deleting them from coverage under the Act. The term ``by 
lot number'' was deleted from (a)(7) to be consistent with proposed 
changes in section 7(e), which allow distributors to voluntarily 
commingle two or more certified lots of like fasteners.
    Section 3 of the Act provides definitions of terms used in the Act 
and in the proposed rule. The following definitions were amended in the 
Act:
     Definition (1) ``alter'' was amended by deleting the 
reference to a minimum tensile strength of 150,000 pounds per square 
inch (psi). It was felt that this type of technical requirement did not 
belong in the Act and should be covered in implementing regulations. 
Accordingly, the issue is dealt with under Sec. 280.2 of this proposed 
rule.
     Definition (2) ``consensus standards organization'' was 
amended by adding the word ``consensus'' in the third line to emphasize 
the reliance upon ``consensus standards'' for fasteners covered by the 
Act.
     Definition (5) ``fastener'' was amended by deleting item 
(D) to be consistent with the deletion of section 4 which assigns the 
Secretary of Commerce responsibility to add or delete fasteners from 
coverage under the Act based upon their use in ``critical 
applications.'' In addition, fasteners produced in accordance with ASTM 
F432 are exempt from coverage under the Act. ASTM F432 covers rock and 
roof bolts and accessories used in the mining industry. This action was 
the result of a petition by the American Mining Congress that such 
products do not meet the intent of the Act and that they are strictly 
regulated by the Mine Safety and Health Administration.
     Definition (6) ``grade identification marking'' was 
amended by deleting the term ``other person'' and replacing it with 
``government agency.'' This change was necessary to be consistent with 
the revision of the definition of ``standards and specifications.''
     Definition (8) ``Institute'' was amended to correct the 
spelling of ``Standards'' in NIST' name.
     Definition (11) ``original equipment manufacturer'' was 
deleted from the Act to be consistent with the change to section 7(f) 
which deletes any reference to OEMs.
     Definition (13) ``standards and specifications'' was 
amended to resolve two major problems. First, the wording in the 
original definition was interpreted by NIST and Commerce attorneys as 
prohibiting the sale of any fastener not fully meeting the requirements 
of the standards or specifications to which it was manufactured. Such 
interpretation does not recognize long-standing industry practice of 
disposing of non-conforming fasteners in accordance with defined 
procedures contained in consensus standards. The objectionable language 
was removed from the definition. Second, the definition as now 
constructed makes it clear that for the purposes of the Act only 
fasteners which are covered by standards and specifications published 
by a consensus standards organization or by a government agency are 
subject to the Act.
     Definition (14) ``through-harden'' was amended by adding 
``* * * for the purpose of achieving a uniform hardness'' to improve 
its meaning.
    Section 4 of the Act was completely deleted. NIST, with the 
assistance of the Fastener Advisory Committee, attempted but was 
unsuccessful in establishing guidelines under which the Secretary of 
Commerce would add or exempt categories of fasteners from coverage 
under the Act. Originally, Congressional intent was that the Act would 
cover only ``high strength'' fasteners used in ``critical 
applications.'' A figure of 1% of fasteners meeting these categories 
was used throughout early Congressional discussions of the Act. 
However, upon passage of the Act and further study and interpretation 
of its requirements by the Department of Commerce, the Fastener 
Advisory Committee, and various industry groups, it became apparent 
that the Act applied to a majority of fasteners in the industry. 
Further, while it was possible to come to an agreement that a 
``critical application'' of a fastener was any application for which it 
was reasonably foreseeable that a failure of the fastener would result 
in serious personal injury or death, significant property damage, or 
significant repair costs, it was not possible to come to agreement a 
priori as to which fasteners were used in critical applications. The 
problem is that a single type or category of fasteners might be used in 
many different applications, some may be critical in terms of having 
the potential for causing death or injury if the fastener(s) fails, and 
others not. The ultimate user of the fastener determines how fasteners 
will be used, and there were many instances cited where ``low 
strength'' fasteners were being used in critical applications. Thus, 
NIST and the Fastener Advisory Committee concluded that there was no 
systematic way in which the Secretary of Commerce could add or exempt 
whole categories of fasteners from coverage under the Act, and that to 
attempt to do so could be costly in terms of potential litigation, with 
no resulting benefit to anyone. Such conclusion was based on evidence 
that there is no instance within the industry where one can make a 
clear-cut case that a particular fastener category, not currently 
covered by the Act, is always used in ``critical applications'' or vice 
versa.
    Section 5 of the Act prohibits selling (or offering for sale) any 
fastener unless it is part of a lot which: (1) Conforms to the 
standards and specifications to which the manufacturer represents it 
has been manufactured; and (2) has been inspected, tested, and 
certified as provided by the Act. An exception to this pre-sale 
requirement is provided for certain small lots. These small lots must 
be tested as soon as practicable after delivery to the purchaser. 
Section 5 also provides that fastener inspection and testing be 
performed by a laboratory accredited in accordance with procedures and 
conditions specified by the Secretary of Commerce. Sections 5(a)(1)(B) 
and 5(a)(2)(B) were amended to add reference to the new section (d) 
covering alternative procedures for chemical testing. Section 5(c)(2) 
was amended to make it clear that the laboratory report of testing must 
include a reference to the standards and specifications the 
manufacturer claims the fasteners have been manufactured to. Section 
5(c)(3) was amended to remove the examples of fastener markings and 
characteristics to be tested. The examples are incomplete and could be 
misleading. Section 5(c)(4) was amended to allow the manufacturer to 
follow section 5(d) regarding alternative procedures for testing 
chemical characteristics of fasteners. A new section 5(d) providing for 
an alternative procedure for determining the chemical characteristics 
of fasteners was added. This new section recognizes a long-standing 
industry practice of manufacturers relying on certificates from the raw 
material supplier for assuring that the chemical characteristics of a 
mill heat of material conform to specified standards. The section 
requires that testing be carried

[[Page 50541]]

out in a laboratory accredited in accordance with the Act.
    Section 6 requires the Secretary of Commerce, acting through the 
Director of NIST, to issue regulations including: (1) Procedures and 
conditions for NIST accreditation of fastener testing laboratories; (2) 
conditions (consistent to the extent practicable with requirements of 
national or international consensus documents) under which private 
entities may apply for approval to directly accredit laboratories in 
accordance with the requirements of the Act; and (3) conditions under 
which the accreditation of foreign laboratories by their governments or 
organizations recognized by the NIST Director will be deemed to satisfy 
the requirements of the Act. The Act leaves to the discretion of the 
Director the procedures NIST will use to determine the competency of 
foreign governments'' (or other organizations') laboratory 
accreditation programs. Section 6(a)(1) was amended to delete the 
reference to the Secretary's issuance of regulations within 180 days of 
enactment of the Act, because that time period is no longer relevant.
    Section 7 of the Act covers sales of fasteners subsequent to their 
manufacture and establishes requirements which manufacturers, 
importers, and private label distributors must meet in the sale of 
fasteners. It also requires that any person who significantly alters a 
fastener so that it no longer conforms to the description in the 
relevant certificate of conformance and offers such fastener for 
subsequent sale is to be treated as a manufacturer for purposes of the 
Act. Section 7 also governs the commingling of fasteners from different 
lots in the same container.
    There were several significant amendments to section 7 of the Act. 
Section 7(a) was amended to delete reference to section 4 of the Act, 
which was deleted. Section 7(a) was also amended to remove the 
responsibility from the manufacturer of domestically produced fasteners 
of supplying to the purchaser, at the time of delivery, a written 
certificate attesting that the fasteners have been manufactured 
according to applicable standards and specifications and have been 
inspected and tested by an accredited laboratory. Instead, the new 
requirement is that the manufacturer maintain on file a manufacturer's 
certificate of conformance covering fasteners and that the certificate 
be available for inspection. The requirement that the original 
laboratory report of test be maintained on file by the manufacturer 
remains unchanged. Copies of the manufacturers certificate of 
conformance and original test report for a given lot of fasteners may 
be requested by purchasers of such fasteners, under an amendment to 
section 10 of the Act. This change was made to reduce paperwork burdens 
under the Act and to reduce the possibility of fraudulent use of 
certificates of conformance or laboratory test reports. It is not the 
intent of these changes to deny access to such information to any 
person who can demonstrate a legitimate need for the information.
    Section 7(b) remains unchanged in terms of requiring delivery of 
fasteners of foreign origin to be accompanied by a manufacturer's 
certificate of conformance and an original laboratory testing report 
for each lot of imported fasteners. Exemptions to these requirements 
are provided for products manufactured within a nation which is a party 
to a congressionally-approved free trade agreement with the United 
States or for Canadian-origin products under the United States-Canada 
Automobile Pact for use as original equipment in the manufacture of 
motor vehicles. Also, importers or private label distributors may take 
delivery of imported fasteners without the original copy of the 
laboratory test report if the manufacturer provides a certificate of 
conformance indicating that the fasteners have been manufactured 
according to the requirements of the applicable standards and 
specifications and the importer or private label distributor assumes 
responsibility in writing for the inspection and testing of the 
fasteners in accordance with the Act.
    Section 7(c)(2) was amended by adding several words to improve its 
meaning. In section 7(d) the word ``certificate'' was replaced with 
``test report'' to make it clear that it is the test report and not the 
manufacturer's certificate of conformance that should be referred to in 
determining whether or not significant alterations have been made to a 
fastener. Section 7(e) on Commingling was amended to permit voluntary 
commingling of two or more tested and certified lots by fastener 
distributors. There is still a restriction on commingling of more than 
two tested and certified lots by manufacturers, importers, or private 
label distributors. Section 7(f) on subsequent purchaser was amended to 
indicate that any person who purchases fasteners for any reason has the 
right to request and receive containers of fasteners with the lot 
number from which they were taken conspicuously marked on the 
container. Section 7(g) was deleted because the Secretary of Commerce 
is provided authority to issue regulations pursuant to the Act in 
section 13.
    Section 8 prohibits offering fasteners for sale that are required 
by an applicable standard or specification to bear a raised or 
depressed insignia identifying the manufacturer or distributor unless 
the manufacturer or distributor has complied with the requirements of a 
program to be established by the Secretary of Commerce for the 
registration of such insignias to ensure that the fasteners may be 
traced to their manufacturers or private label distributors. However, 
the Act does not establish any particular recordation system to effect 
that purpose. The Patent and Trademark Office (PTO) was charged with 
establishing such a system. These requirements are proposed as subpart 
H of this rule.
    Section 9(a) of the Act authorizes the Attorney General to bring an 
action in U.S. district courts for declaratory and injunctive relief 
against persons who violate the Act or implementing regulations. 
Section 9(b) requires the Secretary of Commerce to establish ``notice 
and opportunity for hearing'' procedures for the assessment of civil 
penalties not to exceed $25,000 for each violation of the Act or 
implementing regulations, authorizes penalty recovery actions by the 
Attorney General, and authorizes the Secretary to issue subpoenas of 
witnesses or documents. A ``substantial evidence'' standard of judicial 
review is provided. Section 9(c) of the Act provides for criminal 
penalties, which are enforced by the Department of Justice. A new 
section 9(d) dealing with enforcement was added as an amendment to the 
Act at the request of the Bureau of Export Administration within the 
Department of Commerce. The Bureau of Export Administration has been 
delegated responsibility for enforcement of the Act by the Secretary of 
Commerce. This new language provides authority for agents and 
investigators from the Bureau of Export Administration to also use 
authorities conferred upon them by other laws of the U.S., subject to 
policies and procedures approved by the Attorney General to enforce 
this Act. Proposed regulations implementing section 9 are contained in 
subpart G of this rule.
    Section 10 of the Act deals with record keeping requirements. This 
section was amended to reduce from 10 years to 5 years, the period 
during which records must be kept by persons subject to the Act. In 
section 10(b) the word ``any'' has been replaced by the word ``the'' to 
limit the responsibility of manufacturers, importers, private label

[[Page 50542]]

distributors, and persons who make significant alterations under the 
Act, to supply copies of applicable laboratory testing reports or 
manufacturers' certificates only to their purchasers of fasteners. The 
intent of the change is to reduce paperwork burdens and to protect 
against fraudulent use of test reports and certificates of conformance.
    Section 13 provides authority to the Secretary of Commerce to issue 
regulations pursuant to the Act. The reference to issuance of 
regulations within 180 days of enactment of the Act was deleted because 
the time frame is no longer relevant.
    Section 14 requires the establishment of an advisory committee to 
assist in implementation of the Act. This section was deleted. The 
requirements of the section have been met by NIST.

Background--Part 3: Summary of Public Comments Received by NIST in 
Response to the 1992 Request for Public Comments, and NIST's Response 
to the Comments

    As was noted above, on August 17, 1992, NIST published a proposed 
rule to implement the Fastener Quality Act in the Federal Register (57 
FR 37032). A detailed analysis of the comments follows.

Comments Requesting NIST To Issue Another Proposed Rule

    Several commenters requested that in light of amendments made to 
the Fastener Quality Act under Pub. L. 104-113, NIST should issue 
another proposed rule for public comment. NIST asserts that this final 
rule is the logical outgrowth of the 1992 proposed rule and the public 
comment process. A majority of the public comments received on the 1992 
proposed rule suggested the need for particular amendments to the FQA. 
The suggested amendments were enacted as part of Pub. L. 104-113. This 
rule contains regulations making final the 1992 proposed rule, as well 
as regulations to implement expressly the FQA as amended pursuant to 
specific public comments received regarding the 1992 proposed rule. 
Therefore, under the Administrative Procedures Act, 5 U.S.C. 553, and 
relevant case law, see International Harvester Co. v. Ruckelshaus, 478 
F.2d 615 (D.C. CIR. 1973), South Terminal Corp. v. Environmental 
Protection Agency, 504 F.2d 646 (1st CIR. 1974), and United Steel 
Workers v. Marshall, 647 F.2d 1189 (D.C. CIR. 1980), denied, 101 S.Ct. 
3148 (1981), NIST has determined that it has the authority to issue 
this final rule without the necessity for issuing another proposed 
rule.

Comments Urging Changes to the Regulations Requiring Amendments to the 
Fastener Quality Act

    NIST received 225 letters (146 from fastener distributors, 50 from 
fastener manufacturers, 13 from trade associations, and 13 from 
fastener users or importers, and other sources) supporting 
recommendations of the Fastener Advisory Committee (the ``Committee''), 
which proposed that the following amendments be made to the Fastener 
Quality Act:
     Comment: Permit tests of the chemical composition of 
fasteners to be carried out upon raw materials, rather than upon 
finished lots of fasteners as required by the Act.
    NIST Response: This legislative change was made in Pub. L. 104-113, 
which added a new section 5(d) ``Alternative Procedure for Chemical 
Characteristics'' to the Act. New section 5(d) of the Act is 
implemented in section 280.15 of the regulations being published today.
     Comment: Permit the sale of fasteners which, upon testing 
under the Act, are found to have ``minor'' flaws resulting in the 
fastener not conforming to the tolerances stated in the standards and 
specifications to which they were manufactured. Section 5(a) of the Act 
expressly prohibits the sale of fasteners which (1) do not conform to 
the standards and specifications to which they were manufactured, and 
(2) have not been inspected, tested and certified as provided under the 
Act.
    NIST Response: This legislative change was made in Pub. L. 104-113, 
which amended the definition of ``standards and specifications'' found 
in subsection 3(13) of the Fastener Quality Act. The legislative change 
recognizes the provisions of numerous commercial and military documents 
which provide for a cost effective disposition system for nonconforming 
products when a minor nonconformance does not adversely affect the 
health and safety, performance, interchangeability, reliability, 
maintainability or effective use or operation. The changed definition, 
which will permit the sale of fasteners with minor nonconformances is 
found in Sec. 280.2 of the regulations being published today.
     Comment: Permit distributors to commingle fasteners from 
more than one lot in the same container, thus reducing warehouse costs 
for the distributors, despite the provisions of section 7(e) of the 
Act.
    NIST Response: This legislative change was made in Pub. L. 104-113, 
which amended section 7(e) of the Fastener Quality Act to permit 
commingling of no more than two lots of fasteners under specified 
circumstances. The change is implemented in Sec. 280.4 of the 
regulations being published today.
    Comment: Require that any person who significantly alters a 
fastener be responsible for retesting that fastener, despite the 
provisions of section 7(d) of the Act.
    NIST Response: No legislative changes have been made in response to 
this comment. Accordingly, no changes have been made to the regulation.
     Comment: Restrict the availability of test reports to the 
original purchaser despite the requirements of section 10 of the Act 
that such reports be made available to all subsequent purchasers.
    NIST Response: In section 10(b) of the Act, the word ``any'' has 
been replaced by the word ``the'' to limit the responsibility of 
manufacturers, importers, private label distributors, and persons who 
make significant alterations under the Act, to supply copies of 
applicable laboratory testing reports or manufacturers' certificates 
only to their purchasers of fasteners. The intent of the change is to 
reduce paperwork burdens and to protect against fraudulent use of test 
reports and certificates of conformance.

Subpart A--General

    Comments received by NIST pertaining to this subpart are addressed 
section by section. If no comments were received pertaining to a 
particular section, there is no corresponding entry in this analysis.
Section 280.2  Definitions
    As a result of changes made to subparts C and E of these 
regulations based on comments described in the relevant sections of 
this analysis, several changes have been made to definitions. A 
definition has been added for the term ``Accreditation Body,'' to refer 
to the National Voluntary Laboratory Accreditation Program, and to 
those private entities currently approved by NIST under subpart D of 
these regulations and those foreign governments or organizations 
currently recognized by NIST under subpart E of these regulations. A 
definition has also been added for ``Approved signatory'' to mean an 
individual employed by a laboratory accredited under the Act and these 
regulations who is recognized by an accreditation body as competent to 
sign accredited laboratory test reports. Finally, the definition of 
``Certificate of Accreditation'' has been expanded so that it now 
refers to a document issued by an accreditation body to a laboratory 
that has met the criteria and conditions

[[Page 50543]]

of accreditation, that, together with the assigned code number and 
scope of accreditation issued by the accreditation body, may be used as 
proof of accredited status.
    Various comments suggested that three interrelated definitions, for 
``alter,'' ``critical application,'' and ``significantly alter'' should 
be revised. These comments came from the Fastener Advisory Committee, 
four trade associations, two users, three manufacturers, and one 
foreign government. The Fastener Advisory Committee recommended that 
the definition of ``alter'' be slightly amended to make clear that 
alter pertains to electroplating of fasteners that are ``specified'' as 
having a minimum tensile strength of 150,000 psi or greater, otherwise 
the requirement could be misinterpreted to mean that electroplated 
fasteners that are ``tested'' and found to be greater than 150,000 psi 
would have been considered significantly altered even though they were 
specified with a minimum tensile strength lower than 150,000 psi.

Definition of Significantly Alter

    The Fastener Advisory Committee devoted a great deal of study to 
the term ``Significantly Alter'' through its Alteration Working Group. 
Public comments stressed the need to be clear about what is or is not a 
significant alteration; who is responsible as the alterer of the 
fastener; and what tests and markings are required. Consistent with 
language found in the Act, the Committee felt it is important to define 
a significant alteration as an action which could weaken or otherwise 
materially affect the performance or capabilities of the fastener as it 
was originally manufactured, grade or property class marked, and 
tested. Alterations not considered significant include the application 
of adhesives or sealants, locking elements, cutting off, provisions for 
lock wires, or coatings and platings of parts below a certain hardness 
level to be discussed later in this part. The practice of cutting 
threads off a finished fastener is not defined as a significant 
alteration. Similarly, the cutting of finished threaded studs, rods, 
and bars to produce individual smaller length threaded studs for resale 
is not considered a significant alteration. However, the individual 
fasteners cut from threaded studs, rods, and bars and offered for 
resale shall be individually marked with the grade or property class 
identification marking appearing on or accompanying the original 
threaded studs, rods, and bars from which the fasteners were cut. 
Commenters also asked for clarification on who is responsible as the 
alterer of a fastener. NIST and the Committee agree that the person who 
owned the fastener at the time the alterations were carried out is 
responsible for assuring adherence to the regulations. Accordingly, a 
definition of ``Alterer'' has been added to Sec. 280.2, per the 
Committee's wishes.
    With respect to questions concerning marking and testing of 
significantly altered fasteners, the significant alterer will be 
responsible for applying a registered insignia to the altered fastener 
if so required by the original standards and specifications, and for 
assigning a new lot number. A new Sec. 280.11 has been added to the 
regulations to spell out these requirements. The significant alterer 
will also be responsible for causing the altered fasteners to be 
inspected and tested as required under section 5 of the Act, unless the 
fastener is delivered to a purchaser accompanied by a written statement 
noting the original lot number and the new lot number assigned by the 
alterer, disclosing the subsequent alteration, and warning that such 
alteration may affect the dimensional or physical characteristics of 
the fastener.
    If the alteration is not a significant alteration, a new headmark 
and new lot number are not required and the only testing requirements 
which apply are those required by the specification to which the minor 
alteration was performed, such as prevailing torque or salt spray. If 
the significant alteration is only electroplating of fasteners above a 
certain hardness level or strength level, the requirement for a new 
headmark is waived, but a new lot number must be assigned and testing 
for hydrogen embrittlement must be performed in addition to those tests 
required by the plating specification.
    Based upon subsequent input from the Public Law Task Force on the 
issue of alteration and significant alteration of fasteners, the Task 
Force recommended to Congress that the definition of ``alter'' should 
be amended by deleting the reference to a minimum tensile strength of 
150,000 pounds per square inch (psi). It was felt that this type of 
technical requirement did not belong in the Act and should be covered 
in implementing regulations. Pub. L. 104-113 amended section 3(1)(B) of 
the Act to remove this requirement.
    The Public Law Task Force recommended to the Department that the 
Rockwell C Hardness Scale be used in the regulations in lieu of tensile 
strength for purposes of determining which fasteners have been 
significantly altered through electroplating. It is widely held within 
the fastener industry that the process of electroplating fasteners, 
particularly high strength fasteners, increases their susceptibility to 
hydrogen embrittlement. The intent of the Act and the regulations is to 
require that electroplating of high strength fasteners be considered a 
significant alteration, and to further require that the manufacturer or 
person responsible for the alteration assign a new lot number to the 
fasteners and test them in accordance with the plating specification. A 
specified Rockwell C value of 32 has been selected as the threshold 
hardness for determining when electroplating is a significant 
alteration of fasteners. This value has been selected for the following 
reasons: (1) It is roughly equivalent to the original threshold of 
150,000 psi contained in the 1990 Act (ASTM A370, which provides 
approximate hardness conversion numbers for nonaustenitic steels, 
indicates that Rockwell C 32 is approximately equivalent to a tensile 
strength of 146,000 psi and Rockwell C 33 is approximately equivalent 
to a tensile strength of 149,000 psi), thereby covering the same types 
and grades of fasteners; and (2) setting the threshold Rockwell C 
hardness value at 32 rather than 33 would treat Grade 8 fasteners and 
metric 10.9 fasteners (which are substantially equivalent) equally for 
purposes of determining when electroplating is a significant 
alteration.

Definition of Critical Application

    A large number of comments were received on the definition of 
``critical application.'' Some of the commenters felt that the 
definition did not offer guidance in determining what is meant by 
``significant property damage'' or ``significant repair costs.'' Other 
commenters felt that the definition should be changed to indicate that 
fasteners having minimum tensile strengths of 150,000 psi or greater 
should be considered as critical and those below 150,000 psi should be 
exempt from coverage under the Act because they are not generally used 
in critical applications. The Fastener Advisory Committee and the 
Public Law Task Force devoted much time and effort to studying this 
issue and recommended to Congress that section 4 of the Act be deleted 
in its entirety which would also mean deleting the definition of 
``critical application'' as it applies only to section 4. Section 4 of 
the Act was repealed by Pub. L. 104-113, and accordingly, the 
definition of ``critical application'' has been removed from the 
regulations being published today.
    NIST, with the assistance of the Fastener Advisory Committee, 
attempted but was unsuccessful in

[[Page 50544]]

establishing guidelines under which the Secretary of Commerce would add 
or exempt categories of fasteners from coverage under the Act under the 
now-repealed section 4 of the Act. Originally, Congressional intent was 
that the Act would cover only ``high strength'' fasteners used in 
``critical applications.'' A figure of 1% of fasteners meeting these 
categories was used throughout early Congressional discussions of the 
Act. However, upon passage of the Act and further study and 
interpretation of its requirements by the Department of Commerce, the 
Fastener Advisory Committee, and various industry groups, it became 
apparent that the Act applied to a majority of fasteners in the 
industry. Further, while it was possible to come to agreement that a 
``critical application'' of a fastener was any application for which it 
was reasonably foreseeable that a failure of the fastener would result 
in serious personal injury or death, significant property damage, or 
significant repair costs, it was not possible to come to agreement a 
priori as to which fasteners were used in critical applications. The 
problem is that a single type or category of fasteners might be used in 
many different applications, some may be critical in terms of having 
the potential for causing death or injury if the fastener(s) fails, 
others not. The ultimate user of the fastener determines how fasteners 
will be used, and there were many instances cited where ``low 
strength'' fasteners were being used in critical applications. Thus, 
NIST and the Fastener Advisory Committee concluded that there was no 
systematic way in which the Secretary of Commerce could add or exempt 
whole categories of fasteners from coverage under the Act, and that to 
attempt to do so could be costly in terms of potential litigation, with 
no resulting benefit to anyone. Such conclusion was based on evidence 
that there is no instance within the industry where one can make a 
clear-cut case that a particular fastener category, not currently 
covered by the Act, is always used in ``critical applications'' or vice 
versa.

Definition of Commingling

    The Fastener Advisory Committee felt it was important to define 
commingling because it is used in the Act. Accordingly, the regulation 
has been revised to define ``Commingling'' as meaning the mixing of 
fasteners from different lots in the same container.

Definition of Fastener--Washers Subject to the Act

    During the joint meeting of the Fastener Advisory Committee and the 
Public Law Task Force, held May 15-16, 1996 at the National Institute 
of Standards and Technology (NIST), washer manufacturers present at the 
meeting commented that there was confusion about which washers were 
``fasteners'' under the Act. In particular, they pointed to confusion 
among their customers, many of whom were interpreting the Act as 
covering any washer that was to be used with a bolt or screw that 
itself was covered by the Act.
    Congressional intent on this issue is clearly stated in page 10 of 
Senate Report 101-388, dated July 23, 1990, which accompanied the 
original H.R. 3000 (Fastener Bill). It states as follows: 
``Subparagraph (C) of section 3(5), which defines `fastener,' is 
intended to cover those washers which standards indicate are associated 
with particular fasteners and must be used in order for those fasteners 
to conform to those standards. A washer whose use with a particular 
fastener is permitted but not required is not covered by this 
definition.''
    The Advisory Committee and the Task Force concluded that there were 
only two U.S. standards and specifications which specifically call out 
requirements for washers used in association with covered fasteners 
under the Act, and that the regulations should identify such standards 
and specifications to make it clear what washers were fasteners within 
the meaning of the Act. The standards and specifications are ASTM F959 
or F959M pertaining to load indicating washers, and ASTM F436 or F436M 
which pertain to washers specified for use with structural bolts or 
equivalent high strength bolts. The Advisory Committee and the Task 
Force also pointed out that there may be foreign or international 
equivalents to these standards and specifications.
    The Department believes that the conclusion of the Advisory 
Committee and the Task Force, as stated above, is consistent with the 
stated Congressional intent of the Act, but feels that it would be 
inappropriate to include a specific determination within the 
regulations that only washers manufactured to or held out as being 
manufactured to the above-mentioned standards and specifications are 
fasteners within the meaning of the Act. To do so would unnecessarily 
restrict the freedom of consensus standards bodies to significantly 
change these standards and specifications in the future, or to propose 
new standards and specifications which would have the effect of 
including additional washers as ``fasteners'' within the meaning of the 
Act. In addition, doing so could exclude washers held out as meeting a 
foreign or international standard or specification that requires 
certain washers to be used with particular fasteners in order to 
conform to that standard or specification.

Definition of ``Fastener''--Referencing of Consensus Standards

    During the joint meeting of the Fastener Advisory Committee and the 
Public Law Task Force, held May 15-16, 1996 at the National Institute 
of Standards and Technology (NIST), comments were received from a 
member of the Advisory Committee on that part of the definition of 
``fastener'' in Sec. 280.2 of the regulations, which includes the 
requirement that: ``A screw, nut, bolt, stud, or washer held out as 
being produced according to the requirements of a document other than a 
document published by a consensus standards organization is a fastener 
within the meaning of the Act and this part if that document 
incorporates or references (directly or indirectly) standards and 
specifications published by a consensus standards organization or 
government agency for purposes of delineating performance or materials 
characteristics of the fastener.''
    In the view of this Committee member the Congressional intent was 
to amend the definition of ``standards and specifications'' in section 
3(14) of the Act to remove from coverage under the Act fasteners 
produced to standards and specifications published by ``major end-
users,'' and therefore the language proposed in Sec. 280.2 of the 
regulations as noted above was not consistent with Congressional 
intent. The Committee member proposed an amendment to the definition of 
``standards and specifications'' which would have the effect of 
exempting from coverage under the Act and regulations fasteners 
produced to standards and specifications published by ``major end-
users'' who then purchase such fasteners and install them into a 
structure or assembly. The Department agreed to study this matter and 
no action was taken on the proposal by the Advisory Committee and the 
Task Force.
    The Department has studied this issue and concludes that the 
definition of fastener as provided in Sec. 280.2 of the regulations 
meets Congressional intent. Therefore, the proposal to exempt fasteners 
produced to standards and specifications published by ``major end-
users'' is rejected. The reasons are as follows. In the 1990 version of 
the Fastener Quality Act, ``standards and specifications'' were defined 
as

[[Page 50545]]

documents published by ``consensus standards organizations,'' 
``government agencies,'' and ``major end-users.'' The Act further 
defined ``consensus standards organization'' but did not define ``major 
end-user'' of fasteners. NIST, with the assistance of the Fastener 
Advisory Committee, defined ``major end-user'' in the draft 
implementing regulations issued for public comment in 1992 as ``a 
recognized developer and publisher of standards bearing such user's 
identification which have characteristics similar to national consensus 
standards and which have been developed or modified to fit the specific 
needs of such user.''
    During the 1992 public comment period, comments were received from 
the Fastener Advisory Committee that there are manufacturers and 
private label distributors who modify existing standards and 
specifications to produce unique fasteners either for marketing 
purposes or to satisfy a particular market niche, and that such 
manufacturers or private label distributors might not be considered 
``major end-users'' for purposes of this definition. The result could 
be that fasteners produced this way might be considered ``blueprint 
specials'' and, therefore, not subject to the Act. Based upon such 
comments, the Department proposed a change to the definition of 
``standards and specifications'' to have it read: ``* * * the 
provisions of a document published by a consensus standards 
organization, a government agency, a manufacturer, a private label 
distributor, or a major end-user of fasteners.'' The net effect of the 
proposed change would have been to include a much broader population of 
fasteners under the Act. For example, fasteners produced to a company's 
proprietary standard would have been included under the Act provided 
the fastener met all other requirements pertaining to the definition of 
a ``fastener.''
    In 1995 industry formed the Public Law Task Force to forge a 
unified industry position on needed amendments to the Act. The Task 
Force was invited by Congress to propose clarifying and substantive 
amendments to the Act. NIST was asked to cooperate with the Task Force 
in developing such recommendations. The definition of ``standards and 
specifications'' was an issue raised by the Task Force, who felt that 
the definition was confusing and needed to be simplified. In reviewing 
the definition, NIST concluded that the 1992 proposed change had the 
effect of including within the meaning of the Act fasteners produced to 
standards and specifications published by manufacturers and private 
label distributors, and that such extension of the Act was not 
supportable after a review of Congressional history of the Act. 
Additionally, the definition of ``major end user'' as proposed in the 
1992 draft of the regulations was confusing in terms of deciding which 
standards of which organizations would apply.
    A review of legislative history indicates that the intent was to 
cover fasteners produced for use by original equipment manufacturers 
(OEMs) in ``aircraft, the space shuttle, motor vehicles of all kinds, 
military equipment, highway bridges, and buildings'' (page 2, Senate 
Report 101-388, dated July 23, 1990). Additional evidence is contained 
in the Act itself by virtue of the definition of OEMs contained in 
section 3(11) of the 1990 Act and in examples cited in pp 18-19, of the 
Senate Report cited above. Further, in discussions within the Task 
Force it was clear that industry practice among companies like General 
Motors, Ford, and Chrysler was to reference standards from ASTM, SAE, 
and other consensus standards bodies in their standards.
    Accordingly, the Task Force proposed an amendment to the definition 
of ``standards and specifications'' in section 3(14), which was adopted 
by Congress and which bases the Act's coverage of fasteners on those 
produced to standards and specifications of consensus standards bodies 
and government agencies. Such amendment was proposed with the 
understanding that NIST would further specify by regulation that 
fasteners produced to documents other than those of consensus standards 
organizations or government agencies would be fasteners within the 
meaning of the Act if those documents incorporate or reference 
(directly or indirectly) standards and specifications published by a 
consensus standards organization or a government agency for purposes of 
delineating performance or materials characteristics of the fastener. 
Therefore, fasteners produced to standards and specifications published 
by major end-users are covered by the Act and Regulations, if those 
standards and specifications incorporate or reference, directly or 
indirectly, standards and specifications published by a consensus 
standards organization or a government agency.

Definition of Grade or Property Class Identification Marking

    Several comments were received that the definition of ``Grade or 
Property Class Identification Marking'' should be clarified to 
distinguish between grade or property class marks and ``raw material 
marks.'' A grade mark is placed on a fastener to indicate that the 
material, strength properties, or performance capabilities of the 
fastener conform to a specific standard. A raw material mark indicates 
the base material used and is not considered a grade identification 
mark for purposes of the Act and Regulations, unless the mark is 
required by the fastener standards and specifications to identify 
specific conformance.

Definition of Lot Traceability

    The Fastener Advisory Committee recommended that ``lot 
traceability'' be defined as it is an important term used in the Act 
and regulations. A definition has been provided in the regulations. As 
part of the definition, it is necessary to make it clear that the 
fastener part number, manufacturer's identity, and lot number are 
critical elements of information needed to assure lot traceability. 
Accordingly, a definition has also been added for ``lot-specific 
identification information,'' as meaning information applicable to a 
fastener consisting of, at a minimum, (i) the part number (or a part 
description if there is no applicable part number), (ii) the identity 
of the manufacturer, and (iii) the lot number. A definition has also 
been provided for ``Lot number'' as meaning a number assigned by a 
manufacturer to the lot.

Definitions Related to ``OEMS''

    Eight commenters, five manufacturers and users of fasteners, and 
three trade associations suggested that changes should be made in the 
definitions contained in the regulations to clarify the meaning of the 
terms ``original equipment manufacturer'' (OEM) and ``authorized 
dealer.'' Some of the commenters suggested that a definition should be 
provided for the term ``authorized dealer'' in order to clarify that 
the term ``original equipment manufacturer'' is not limited to the 
automobile industry. Other commenters expressed confusion about the 
application of the regulation in the context of original equipment 
manufacturers who are also importers. Two amendments to the Act have 
taken care of this issue. First, section 7(e), commingling was amended 
to permit voluntary commingling of fasteners by distributors and the 
reference to original equipment manufacturer was removed. Second, the 
definition of ``original equipment manufacturer'' in section 3(11) was 
deleted.

[[Page 50546]]

Definition of Original Laboratory Testing Report

    During the May 1996 joint meeting of the Fastener Advisory 
Committee and the Public Law Task Force there was discussion about the 
requirement in Sec. 280.5 of the regulations that an ``original 
laboratory testing report'' was required to be maintained on file with 
the manufacturer, importer, or private label distributor. Questions 
arose as to what constituted an original test report. In order to 
clarify the intent of the regulations a definition of ``original 
laboratory testing report'' has been added which states that it is ``a 
laboratory testing report which is originally-signed by an approved 
signatory or a copy thereof, certified by the laboratory that conducted 
the test''.

Definition of Standards and Specifications

    Comments were received from the Fastener Advisory Committee 
concerning the definition of ``Standards and Specifications.'' The 
Committee noted that there are manufacturers and private label 
distributors who modify existing standards and specifications to 
produce unique fasteners either for marketing purposes or to satisfy a 
particular market niche, and that such manufacturers or private label 
distributors might not be considered ``major end-users'' for purposes 
of this definition. The definition of ``standards and specifications'' 
has been amended in the Act to make it clear that for purposes of the 
Act only fasteners covered by standards and specifications published by 
a consensus standards organization or by a government agency are 
subject to the Act.

Definition of Traceability

    Four commenters, three manufacturers and one trade association, 
suggested that the term ``traceability'' should be revised to 
distinguish between traceability of fasteners and traceability as 
defined in the context of the standards arena. In response to this 
comment, the definition of ``traceability'' contained in the draft 
regulations has been replaced by two definitions. The first, ``Lot 
traceability,'' defines traceability in the context of fasteners as 
meaning the recording and maintenance of lot-specific identification 
information sufficient to trace fasteners from a single lot throughout 
(i) the manufacturer's fabrication or alteration process, (ii) all 
inspection and testing operations, and (iii) the subsequent chain of 
distribution in commerce. The second, ``Traceability of Measurements,'' 
defines measurement traceability as meaning a documented chain of 
comparisons connecting the accuracy of a measuring instrument to other 
measuring instruments of higher accuracy and, ultimately, to a primary 
standard.
    In response to a series of comments on laboratory test reports 
which are described below in the narrative relevant to that section, a 
definition of ``Tamper-resistant system'' has been added to Sec. 280.2. 
The phrase is defined to mean the use of special paper, embossing 
stamps, or other controls which discourage, prevent, or minimize 
alteration of test reports subsequent to manufacturing, inspection, and 
testing.
Old Sec. 280.4: Waiver Requirement and Old Sec. 280.5: Inclusion of New 
Fasteners
    Pub. L. 104-113 repealed section 4 of the Act, rendering these 
sections obsolete. Accordingly, they have been removed from the 
regulation being published today.
New Sec. 280.4: Commingling
    Pub. L. 104-113 amended section 7(e) of the Fastener Quality Act to 
permit voluntary commingling of no more than two tested and certified 
lots by fastener distributors. There is still a restriction on 
commingling of more than two tested and certified lots by 
manufacturers, importers, or private label distributors. The change is 
implemented in Sec. 280.4 of the regulations being published today.
New Sec. 280.5: Certification of Fasteners
    One commenter asked whether the regulation requires distributors to 
furnish to their customers a manufacturer's certificate when they make 
their sale. NIST notes that distributors are not required to provide 
copies of the certificates. A new Sec. 280.5 of the regulation has been 
added which specifies information that must appear in the ``certificate 
of conformance'' and the responsibility of the manufacturer to maintain 
the certificate on file available for inspection. The sale of fasteners 
by parties other than the manufacturer without an accompanying 
certification is not prohibited.
Section 280.6: Laboratory Test Reports
    A wide range of comments were received by NIST on the general topic 
of the requirements for laboratory test reports set out in Sec. 280.6 
of the regulations. For ease of analysis, those comments are discussed 
under the following general categories:
    * General Observations and Comments;
    * Authorized Signatories;
    * Tamper Proof Paper; and
    * Test Report Contents.
    Each of these topics is discussed below.

General Observations and Comments

    NIST received eight general comments on the requirements set out in 
Sec. 280.6 for the content of laboratory test reports. Four commenters 
(three manufacturers and one importer) stated that the reports were 
either burdensome, clumsy, irrelevant or otherwise unpleasant, and 
suggested that revisions be made to ``clean up'' Sec. 280.6. NIST's 
response to these comments is contained in the following paragraphs. 
Another commenter suggested that NIST require that all test reports 
include the words ``Certified Fastener Test Report'' in a clear and 
prominent position. No change to the regulation has been made based 
upon this comment. Three manufacturers and a trade association 
suggested that NIST delete the requirement to report on ``test 
conditions, test set up'' found in Sec. 280.6(a). This deletion has 
been made.
    NIST has made a number of changes to the regulation in an effort to 
simplify and clarify the required contents of laboratory test reports. 
In addition, some of the required elements of laboratory test reports 
have been grouped into logical units that NIST hopes will make the test 
reports more logical and orderly in presentation. Old Secs. 280.6(a) 
(6), (7) and (8) from the proposed regulation have been grouped under 
the category ``Sampling Information'' in a renumbered Sec. 280.6(a)(5), 
and have been assigned the numbers 280.6(a)(5) (i), (ii) and (iii). In 
addition, old Secs. 280.6(a) (9), (10), (12), (14) and (15) from the 
proposed regulation have been grouped under the category ``Test 
Results'' in a renumbered Sec. 280.6(a)(6), and have been assigned the 
numbers 280.6(a)(6) (i), (ii), (iii), (iv), (v) and (vi).

Approved Signatories

    NIST received three comments on the requirement contained in 
Sec. 280.6(a)of the regulation that all laboratory test reports be 
signed by an approved signatory. All three comments were from 
manufacturers, and suggested either that the requirement for a 
signature be removed completely, or that copies of signatures be 
permitted. No changes have been made by NIST to the regulation. An 
original test report containing an ``original signature of an approved 
signatory'' of the laboratory must be provided to the manufacturer, and 
under section 7(a)(2) of the Act the original test report must be 
maintained on file with the manufacturer and be available for 
inspection. However, copies of such report provided by the manufacturer 
on a request basis to

[[Page 50547]]

customers do not have to bear original signatures. A definition of 
``approved signatory,'' has been added to Sec. 280.2 of the regulation 
to clarify which individuals are empowered to sign test reports on 
behalf of accredited laboratories.

Tamper Proof Paper

    NIST received twelve comments pertaining to the requirement found 
in Sec. 280.6(a) that all laboratory test reports use tamper proof 
paper. Seven of the comments urged that the requirement for tamper 
proof paper be deleted; these comments came from three manufacturers, 
two trade associations and two users of fasteners.
    The remaining five comments urged that the requirement for tamper-
proof paper be replaced by a requirement for a system which discourages 
tampering, perhaps embossing, because tamper-proof paper is not 
generally available. These comments came from four manufacturers and 
one trade association. As a result of these comments, NIST has revised 
Sec. 280.6(a) of the regulations to provide for the use of a ``tamper-
resistant system'' in the preparation of laboratory test reports. In 
addition, a definition has been added to Sec. 280.2 as follows 
``Tamper-resistant system'' means the use of special paper or embossing 
stamps or other controls which discourage, prevent or minimize 
alteration of test reports subsequent to manufacturing, inspection and 
testing.

Test Report Contents

    NIST received numerous comments pertaining to the specific contents 
of laboratory test reports required by Sec. 280.6 of the regulations. 
In the following paragraphs these comments are described along with 
NIST's response to them.
    One comment from an importer stated that Sec. 280.6(a)(3) should be 
revised so that ``Name of client'' should apply only to independent 
laboratories, and not to in-house laboratories. In order to avoid 
creating confusion for parties that may review the laboratory test 
report at a later date the regulation has not been changed.
    NIST received eleven comments on the provisions of old 
Sec. 280.6(a)(5) (now Sec. 280.6(a)(4)), which pertains to the 
description of the fastener required in laboratory test reports. 
Comments from a manufacturer and an importer raised concern about the 
requirement for describing head markings found in old 
Sec. 280.6(a)(4)(iii) (now Sec. 280.6(a)(4)(iv)). One commenter 
suggested that the requirement should be deleted, and another suggested 
that the requirement was too burdensome. NIST has determined that the 
requirements of this section are essential to the report, and have 
clarified its wording that both the manufacturer's recorded insignia 
and grade markings must be reported. Three comments were received about 
old Sec. 280.6(a)(4)(iv) (now Sec. 280.6(a)(4)(v)), an importer 
observing that the requirement for a listing of thread tolerance on 
laboratory test reports was not needed because this information was 
specified by a standard; a distributor stated that the section should 
refer to ``Nominal Diameter'' instead of ``Diameter''; and an agency of 
the United States Government suggested that ``class of fit'' be 
replaced with ``dimensional tolerance class'' and add ``thread 
application category (safety critical thread, other thread etc.), or 
conformance requirements, and the dimensional standard under which the 
threads were manufactured.'' The section has been revised to refer to 
``nominal dimensions'' as suggested.
    Continuing the discussion on old Sec. 280.6(a)(5) (now 
Sec. 280.6(a)(4)), one manufacturer suggested that the section be 
revised to require inclusion in the test report of information on the 
revision level of applicable drawing or standard at the time of 
manufacture. Also, a trade association suggested that the same section 
be revised to add part numbers. No changes have been made to the 
regulation based upon these comments since NIST believes that adequate 
information on these matters is already required. Another manufacturer 
suggested that old Sec. 280.6(a)(5)(viii) (now Sec. 280.6(a)(4)(viii)) 
be revised by changing ``specification and grade of material'' to 
``grade of material.'' No change was made to the regulation based upon 
this comment. A user and a manufacturer each suggested that old 
Sec. 280.6(a)(4)(ix) be revised to eliminate ``heat treated to the 
requirements of the following specification'' and this change has been 
made. The last comment on old Sec. 280.6(a)(5)(now Sec. 280.6(a)(4)) 
was a suggestion by a user who suggested that it be revised not to 
require thickness, baking, and so on. The coating material must be 
specified, but the regulation has been changed in the now 
Sec. 280.6(a)(4)(ix) to drop any reference to thickness of coating or 
baking of fasteners.
    Three manufacturers and a trade association suggested that original 
Sec. 280.6(a)(8) (now Sec. 280.6(a)(5)(iii)) be revised to delete the 
name and affiliation of the person performing lot sampling, and two 
manufacturers, a user and an importer suggested that Sec. 280.6(a)(9) 
was redundant. NIST has determined that these elements are essential to 
the report; accordingly no changes have been made. Five comments were 
received pertaining to original Sec. 280.6(a)(10) (now 
Sec. 280.6(a)(6)(ii)) of the regulations, divided among two 
manufacturers, a user, an importer, and a trade association. The 
commenters noted that a clarification was needed of the meaning of 
``test results''; that is, whether the results should be given as pass/
fail, as maximum and minimum results, or within the context of actual 
specification limits. The ``test results'' to be recorded in the test 
report are those specified in the applicable standard, specification, 
or test method cited by the manufacturer and/or used by the laboratory. 
Hence, no change to the regulation was made based upon these comments.
    Three comments from manufacturers questioned the provisions of 
original Sec. 280.6(a)(12) (now Sec. 280.6(a)(6)(iii)) pertaining to 
reporting on all deviations from the test method, asking whether 
deviations from the test method would result in flawed testing/
erroneous test results. Two commenters, a manufacturer and an importer, 
suggested that original Sec. 280.6(a)(14) (now Sec. 280.6(a)(6)(iv)) 
should be revised by deleting ``all other items required by the test 
method'' as ambiguous or expanding the section to define that which is 
required. No changes have been made to the regulation based upon this 
comment. One manufacturer commented that the wording of original 
Sec. 280.6(a)(15) (now Sec. 280.6(a)(6)(vi)) appears to suggest 
nonconforming products can be sold.
    Two manufacturers recommended that old Sec. 280.6(a)(17) (now 
Sec. 280.6(a)(8)) be deleted, thus removing the requirement that the 
test report relate only to the item(s) tested, and two manufacturers 
suggested deleting the requirement found in Sec. 280.6(a)(18) (now 
Sec. 280.6(a)(10)) for reporting the name of the body which accredited 
the laboratory for the specific tests performed which are the subject 
of the report and the current period of accreditation. NIST has 
determined that this information is essential to the report, and the 
requirements of these two sections have not been removed.
    One user commented that current Sec. 280.6(c) should be revised to 
require numbering for supplemental reports amending previously issued 
reports. No change has been made to the regulation based upon this 
comment because the regulation already provides that supplementary 
information must be reported on a ``suitably marked'' document.

[[Page 50548]]

Section 280.7: Recordkeeping Requirements
    The Department received comments on a variety of issues raised by 
Sec. 280.7 of the regulations. A paragraph is devoted below to each of 
these issues.
    NIST received four comments, two from manufacturers and two from 
trade associations, stating that test reports should only be available 
to the original purchaser. An amendment to section 10 of the Act 
provides for this.
    NIST received ten comments suggesting that Sec. 280.7(a) be revised 
to permit electronic record storage, five from manufacturers, three 
from trade associations, one from a university professor and one from a 
consultant. This final rule provides that records may be kept in the 
form (whether paper, photographic, electronic or some other form) in 
which they are created or received by the regulated person. In 
addition, Sec. 280.7 of this final rule permits reproductions 
(including paper, photographic, magnetic, or some other form) to be 
kept in lieu of originals for all records except for test reports (for 
which the Act requires originals). However, it establishes specific 
requirements of retrievability and legibility that must be met if the 
person required to keep records elects to destroy originals and keep 
reproductions in lieu thereof. It also makes clear that the regulated 
person must make the records available to NIST or BXA upon request.
    A testing laboratory and a government agency noted that the law has 
no provisions for the protection of records should a manufacturer or 
test laboratory file bankruptcy, be dissolved, or be destroyed by fire 
and/or by an act of God. The commenters recommended that this problem 
be addressed, and that it be documented as either a waiver to the law 
or a requirement to the law as how to protect records for ten years in 
the event of a misfortune to the manufacturer and/or test facility. In 
response, NIST notes that the Act contains no provision for waiving the 
record retention requirement under any circumstance and that 1996 
amendments to the Act reduced the record retention requirement to five 
years.
    Three commenters, two manufacturers and a trade association, 
suggested that the wording in Sec. 280.7(a) requiring that the records 
be sufficiently detailed to permit duplication of the ``exact test 
conditions'' at a later date be relaxed, perhaps to simply require 
sufficient information to ``allow the test results to be verified by a 
retest if necessary.'' Section 280.7 of this final rule adopts this 
change.
Section 280.8: Ownership of Laboratories by Manufacturers
    NIST received three comments concerning Sec. 280.8 of the 
regulations, one from a user, one from a trade association, and one 
from the category ``other.'' One commenter suggested that NIST ban all 
ownership of testing laboratories by manufacturers; another commenter 
urged that NIST impose no ban on the ownership of testing laboratories 
by manufacturers; and the third stated that it was unclear what 
conditions might be imposed on accredited laboratories affiliated with 
a manufacturer.
    Section 280.8 of the regulations repeats the provisions of section 
5(b) of the Act, essentially verbatim. As written, Sec. 280.8 creates a 
procedural mechanism under which decisions may be made by the Director 
of NIST as to whether the public health and safety would be increased 
by a ban on the ownership of testing laboratories by manufacturers for 
specific types of fasteners and tests. Specifically, any ban would be 
the subject of a notice and comment process before taking effect. NIST 
believes that its discretion in proposing a particular ban intended to 
protect the public health and safety should not be limited in advance 
by regulation. Accordingly, no change has been made to this section of 
the regulations.
Section 280.9: Subcontracting of Testing
    Several commenters appeared to be confused as to whether tests 
carried out by subcontractor laboratories under the provisions of 
Sec. 280.9 of the regulations would meet the requirements of the Act. 
Some expressed confusion as to what entities qualified as 
subcontractors. One manufacturer, for example, suggested that suppliers 
and manufacturers be permitted to be subcontractors. Two other 
manufacturers expressed similar confusion. One distributor suggested 
revising Sec. 280.9(b)(2) to eliminate confusion by adding the word 
``accredited'' to references to the subcontractor.
    NIST believes the regulation is clear as written and no changes are 
made to it based upon these comments. However, in order to avoid any 
possibility of further confusion, NIST wishes to stress that any and 
all subcontracting of testing under the Fastener Quality Act must be to 
a laboratory that is accredited under the Act and these regulations. 
Any party that meets the conditions set out in this regulation may 
apply for such accreditation, regardless of their affiliation with a 
manufacturer, distributor or other entity.
    In addition to the comments described above, NIST received six 
comments, three from trade associations, two from manufacturers and one 
from a distributor, urging that the regulations be revised to delete 
the requirement found in Sec. 280.9(b)(2) for notification of the 
client before the fact that the tests will be subcontracted by the 
accredited laboratory to another laboratory. NIST does not agree with 
these comments, and takes the view that notification of the client 
before the fact is important to allow them to decide if they wish for 
all testing to be done in-house.
Section 280.10: Sampling
    NIST received six comments, from four manufacturers and two trade 
associations, suggesting that the emphasis of the regulations on final 
inspection is misplaced and that the industry practice is statistical 
process control. These commenters suggested the use of statistical 
process control rather than lot sampling in the regulation. They 
further suggested that the regulation be revised to include the use of 
ANSI/ASME B18.18.3M, and ANSI/ASME B18.18.4M, in addition to ANSI/ASME 
B18.18.2M already referenced in Sec. 280.10, for purposes of sample 
selection when the standard being used by the fastener manufacturer 
does not include a sampling plan. In addition to the above comments, 
submitted in response to the August 1992 comment period on the proposed 
regulations, the automobile industry submitted comments in August 1996 
on the same issue of statistical process control. As part of their 
comments, the automobile industry projected costs of between $140 
million and $209 million annually if its suppliers of automotive 
fasteners are required by the Act and regulations to conduct final 
inspection of finished fasteners. The costs projected by the industry 
were apparently predicated on two assumptions: (1) That the Act and 
regulations require final inspection of finished fasteners in lieu of 
in-process inspection and controls; and (2) that the Act and 
regulations require the use of ASME B.18 quality assurance standards 
for inspection and testing of fasteners in lieu of QS9000 quality 
assurance standards, which are currently in-use within the automobile 
industry. NIST has concluded that neither of these assumptions are 
valid for the following reasons. First, there is nothing in the Act or 
implementing regulations that prohibits the in-process inspection and

[[Page 50549]]

testing of a given lot of fasteners based upon quality assurance 
programs such as QS9000, so long as the requirements of sections 5 (a), 
(b), and (c) of the Act are met. That is: (1) The tests called out by 
the applicable fastener standards and specifications have been carried 
out; (2) the tests have been carried out by a laboratory accredited in 
accordance with section 6 of the Act; and (3) the data are reported on 
a test report in accordance with Sec. 280.6 of the implementing 
regulations. NIST recognizes that some product standards from the 
Society of Automotive Engineers (SAE) and from the American Society of 
Testing and Materials (ASTM) used in the automotive industry require 
final inspection of fasteners, and that under statistical control 
procedures, fastener manufacturers may control influence factors (e.g., 
temperature, pressure, etc. in heating treating operations) as a means 
of assuring that a particular physical property such as hardness is 
within the stated values of the standard rather than conduct final 
inspection. Under these circumstances, supporting data for a test that 
may be required by the SAE or ASTM standard, indicating that the 
fastener lot had been tested for hardness and providing the test 
results would not be available. Hence, the manufacturer may not be able 
to meet the requirements of sections 5 (a), (b), and (c) of the Act 
because there would be no specific evidence that a hardness test had 
been conducted if it is required by the standard. Under the Act this 
problem can be easily resolved by having the automobile industry 
request that SAE or ASTM change the affected fastener standards so that 
the manufacturer has the choice in satisfying the standard, and thus 
the Act and regulations, by either providing data that the influence 
factors affecting hardness are in control for that lot of fasteners, or 
providing data that a discreet hardness test has been conducted. The 
Act, in relying on standards and specifications from consensus 
standards organizations and from government agencies as the basis for 
technical requirements to be met by manufacturers, provides significant 
flexibility to these standards developers to determine the inspection 
and testing requirements for certification of fasteners under the Act 
and regulations. Second, as to the automobile industry's assumption 
that the Act requires the use of ASME B18 quality assurance standards, 
the Act does not mandate the use of any standard or specification. 
Under authority provided by section 5(b)(2)(B) of the Act, and at the 
request of the Fastener Advisory Committee, NIST has included 
references to ANSI/ASME B18.18.2M, B18.18.3M and B18.18.4M, for sample 
selection in the event the standard or specification used by the 
manufacturer does not provide for the size, selection, or integrity of 
the sample to be selected. NIST does not have the authority to mandate 
the use of the ANSI/ASME B18.18.2M, 3M, or 4M standards for all 
inspection and testing carried out under section 5 of the Act.
Old Section 280.11: Surplus Fasteners
    This section was deleted.
New Section 280.11: Significant Alteration of Fasteners
    With respect to questions concerning marking and testing of 
significantly altered fasteners, the significant alteror will be 
responsible for applying a registered insignia to the altered fastener 
if so required by the original standards and specifications, and for 
assigning a new lot number. A new Sec. 280.11 has been added to the 
regulations to spell out these requirements. The significant alteror 
will also be responsible for causing the altered fasteners to be 
inspected and tested as required under section 5 of the Act, unless the 
fastener is delivered to a purchaser accompanied by a written statement 
noting the original lot number and the new lot number assigned by the 
alteror, disclosing the subsequent alteration, and warning that such 
alteration may affect the dimensional or physical characteristics of 
the fastener.
    If the alteration is not a significant alteration, a new headmark 
and new lot number are not required and the only testing requirements 
which apply are those required by the specification to which the minor 
alteration was performed, such as prevailing torque or salt spray. If 
the significant alteration is only electroplating of fasteners above a 
certain hardness level or strength level, the requirement for a new 
headmark is waived, but a new lot number must be assigned and testing 
for hydrogen embrittlement must be performed in addition to those tests 
required by the plating specification. If the alteration involves 
cutting of threaded studs, rods, or bars into studs, these cut 
fasteners must be marked with the grade or property class 
identification marking appearing on the original threaded studs, rods, 
and bars.
New Section 280.12: Applicability
    Seven commenters expressed concern during the 1992 comment process 
that the requirement for the use of accredited laboratories not take 
effect until a sufficient number of foreign accreditation bodies and 
laboratories have been recognized and accredited. The commenters also 
expressed concern as to how NIST would know when the number of 
accredited laboratories is sufficient. These comments were received 
from two trade associations, two importers, one distributor, one 
representative of a foreign government, and one individual.
    Except as provided in this section, the regulation will become 
effective on November 25, 1996. However, NIST notes that section 15 of 
the Act makes the regulation applicable only to fasteners manufactured 
180 days after the regulation becomes effective, i.e., May 27, 1997 and 
also provides that the Director of NIST may delay the applicability of 
the regulations to fasteners manufactured beyond that date if at that 
time an insufficient number of laboratories have been accredited to 
perform the volume of inspection and testing required. A new 
Sec. 280.12 of the regulations has been added in order to clarify this 
point.
    NIST intends to closely monitor the accreditation of laboratories 
under these regulations, and will defer the applicability of the 
regulations should circumstances warrant.

Status of Inventory

    One commenter during the 1992 comment process asked whether 
existing inventories of fasteners will be covered when the regulations 
take effect.
    NIST notes that section 15 of the Act requires only that the 
regulations be applicable to fasteners manufactured 180 days or more 
after the regulations become effective (herein after referred to as 
implementation date). This issue of applicability of fasteners has been 
discussed several times since the 1992 comment process. In its January 
10, 1995, report and recommendations for amending the Act, the Public 
Law Task Force recommended that fasteners manufactured before the 
implementation date not be allowed to be certified as conforming 
fasteners under the Act. This recommendation was endorsed by the 
Fastener Advisory Committee in letters to Congress dated February 9, 
1995. During the joint meeting of the Fastener Advisory Committee and 
the Public Law Task Force, held May 15-16, 1996, at the National 
Institute of Standards and Technology (NIST), this issue was raised 
again. In addition, the Advisory Committee and the Task Force 
recommended that language be added to the regulations which would 
permit the use of metal manufactured before the implementation date to 
be used to manufacture fasteners after that date.

[[Page 50550]]

    In order to clarify these points, a new Sec. 280.12 has been added 
to the regulations, stating that the requirements of the Fastener 
Quality Act and these regulations shall be applicable only to fasteners 
fabricated 180 days or more after the effective date of the 
regulations. This Act and these regulations do not restrict the sale of 
fasteners manufactured prior to the implementation date. Fasteners 
manufactured prior to the implementation date may be sold in U.S. 
commerce for an indefinite period of time, provided such fasteners are 
not offered for sale or sold as being in conformance with the Act and 
these regulations. The section also specifies that metal manufactured 
prior to the implementation date may not be used to manufacture 
fasteners covered by the Act and these regulations after such date, 
unless the metal has been tested for chemistry pursuant to Sec. 280.15 
of these regulations by a laboratory accredited under the Act and these 
regulations.
    The Director of NIST may delay the applicability of the regulations 
beyond the 180-day time period upon making a determination that an 
insufficient number of laboratories have been accredited to perform the 
volume of inspection and testing required.
New Section 280.13: Imports of Fasteners and New Section 280.14: Option 
for Importers and Private Label Distributors
    One commenter questioned whether the draft regulation was 
consistent with the Act's treatment of importers. After reviewing the 
regulations, NIST has decided to add a new Sec. 280.13 of the 
regulations dealing with imports of fasteners, and also a new 
Sec. 280.14 dealing with options for importers and private label 
distributors. New Sec. 280.13 sets out the rule contained in section 
7(b) of the Act that it shall be unlawful for any person to sell to an 
importer, and for any importer to purchase any shipment of fasteners or 
fastener sets manufactured outside the United States unless such 
shipment to an importer is accompanied by a manufacturer's certificate, 
an original laboratory testing report with respect to each lot from 
which the fasteners are taken, and any other relevant lot 
identification information. It then sets out the statutory exceptions 
to the general rule, which require that delivery of fasteners to any 
importer must be accompanied by an original laboratory testing report 
shall not apply:

    (1) In the case of fasteners imported into the United States as 
products manufactured within a nation which is party to a 
congressionally approved free trade agreement with the United States 
that is in effect, provided that the Director has published in the 
Federal Register a certification that satisfactory arrangements have 
been reached by which purchasers within the United States can 
readily gain access to an original laboratory test report for such 
fasteners. Or,
    (2) In the case of fasteners imported into the United States as 
Canadian-origin products under the United States-Canada Automobile 
Pact for use as original equipment in the manufacture of motor 
vehicles.

    At the present time, no Federal Register notice is planned by NIST 
under exemption (1); accordingly, this exemption is not now available.
    New Sec. 280.14 sets out the statutory provisions of section 7(c) 
of the Act. Entitled ``Option for Importers and Private Label 
Distributors,'' Sec. 280.14 states that notwithstanding the provisions 
of Sec. 280.13, delivery of a lot, or portion of a lot, of fasteners 
may be made by a manufacturer to an importer or private label 
distributor without the required original copy of the laboratory 
testing report if the manufacturer provides to the importer or private 
label distributor a manufacturer's certificate certifying that the 
fasteners have been manufactured according to the requirements of the 
applicable standards and specifications; and the importer or private 
label distributor assumes responsibility in writing for the inspection 
and testing of such lot or portion by an accredited laboratory. The 
section also provides that the provisions of section 5(a) and sections 
7(a) and 7(b) of the Act shall apply to the importer or private label 
distributor in the same manner and extent as to a manufacturer.
New Section 280.15: Alternative Procedure for Chemical Characteristics
    Pub. L. 104-113 enacted a new subsection 5(d) of the Fastener 
Quality Act entitled ``Alternative Procedure for Chemical 
Characteristics.'' The new procedure is implemented in Sec. 280.15 of 
the regulations being published today.
New Section 280.16: Subsequent Purchaser
    This section reflects changes made to section 7(f) of the Act by 
Pub. L. 104-113.

Subpart B--Laboratory Accreditation

    NIST received no specific comments on subpart B of the regulations.

Subpart C--NIST Fastener Laboratory Accreditation Procedures

    To meet the requests of many commenters that the criteria for 
accreditation follow ISO/IEC Guide 25 ``General Requirements for the 
Competence of Calibration and Testing Laboratories,'' section 280.201 
establishes that the criteria for accrediting laboratories under the 
Act will be part 285, title 15, Code of Federal Regulations, which are 
NVLAP procedures that conform with the requirements of ISO/IEC Guide 
25. Furthermore, since ISO/IEC Guide 25 is the document used 
internationally by accreditation bodies to assess the competence of 
laboratories, the revised procedures should facilitate interpretation 
of the NVLAP criteria at the international level.
Section 280.200--Introduction
    One commenter, an agency of the United States Government, requested 
that a requirement be added stating ``Standards with similar scopes, 
but with different requirements shall not have the same: (a) Title, (b) 
standard designation number, (c) product labeling system, or (d) 
conformance requirements labeling system.'' The standards organizations 
are responsible for controlling these concerns. The regulation has not 
been changed. However, the Director of NIST will work with the 
standards organizations to resolve any problems of this nature.
    A representative for foreign manufacturers requested that 
laboratories should be allowed to perform the same kind of test to 
comply with standards from different countries. Since the Act provides 
that the manufacturer of fasteners certify that the fasteners meet the 
requirements of the standards and specifications, the regulation was 
not changed.
    A laboratory requested the addition of a ``Code of Ethics.'' Many 
specific requirements and conditions are mandated for accredited 
laboratories and no change was made to this section.
    A laboratory accreditation body asked for a clarification as to 
whether a laboratory's quality assurance program must assure a required 
degree of accuracy and precision beyond that required by standard test 
methods used. NVLAP procedures cited in Sec. 280.201 address 
measurement traceability and calibration requirements.
    A trade association requested a retest be required for foreign 
sources at the receiving end. Since this is contrary to the Act's 
treatment of foreign products this section was not changed. The trade 
association also requested that the regulation ``should include 
requirements and methods for notifying customers/users of lots with 
latent defects discovered after delivery.'' Existing mechanisms for 
notification of users of fasteners with latent defects are

[[Page 50551]]

not preempted by the requirements in this regulation. However, 
procedures cited in Sec. 280.201 do require laboratories to notify 
clients promptly, in writing, of any event, such as the identification 
of defective measuring or test equipment, that casts doubt on the 
validity of results.
New Section 280.203--Adding to or modifying the Program
    A new Sec. 280.203 was added to reflect the Act's intent that the 
program reflect the changing requirements placed upon laboratories by 
the industry. This section allows the program to be added to, modified, 
or realigned based on either a written request or a need identified by 
NIST. Subsequent sections in this subpart have been renumbered 
accordingly.
Old Section 280.203 New Section 280.204--NVLAP Program Handbook
    A domestic manufacturer, a distributor and a consultant requested 
that the handbook follow ISO/IEC Guide 25-1990. This did not require a 
change to the regulation, however, the draft handbook is compatible 
with the ISO/IEC Guide 25 and contains a general operations checklist 
which follows the ISO/IEC Guide 25 technical requirements. The NVLAP 
Handbook will supplement this Subpart.
    A consultant, an accreditation body, a foreign manufacturer and two 
foreign aerospace associations requested distribution of the NVLAP 
handbook. This did not require a change to the regulation. However, in 
preparation for the February 1993 workshop, over 600 copies of the 
draft NVLAP handbook were distributed for public comment.
    A foreign manufacturer commented that there were too many test 
methods with not enough details, and no instructions for testing core 
hardness of \1/4\'' diameter bolts. Since the standards and 
specifications determine how fasteners are to be tested, no change in 
the regulation was made to address this comment. The commenter should 
contact relevant standards organizations with specific concerns.
Old Section 280.204 New Section 280.205--Applying for Accreditation
    Additional requirements were added to this section for foreign 
laboratories. These requirements were necessary to enable NVLAP to 
assess properly foreign laboratories and establish fees to maintain 
self-sufficiency. The following language was added. Foreign 
laboratories may require:
    (1) Translation of laboratory documentation into English; and
    (2) Payment of additional traveling expenses for on-site 
assessments and proficiency testing.
Old Section 208.206 New Section 280.207--Granting and Renewing 
Accreditation

On-site Assessment Interval

    A fastener manufacturer and a college professor commented that the 
on-site assessment interval was not specified. No change to the 
regulation was made. This information is provided in the NVLAP 
handbook.

Accreditation by Discipline Rather than by Test Method

    Two laboratories suggested that accreditation be offered by 
discipline rather than by test method. No change in the regulation was 
made. The handbook explains the approach which NVLAP will use to group 
together like test methods and accredit laboratories for the entire 
group.

Accreditation Period

    Six technical societies/trade associations, 7 fastener 
manufacturers and 2 consultants requested that accreditation be changed 
from 1 year to 3 years. Comments received from an agency of the United 
States Government and 3 manufacturers requested a 2-year accreditation. 
One automotive manufacturer requested the period be extended beyond one 
year. The reference to a one-year accreditation period has been deleted 
from this section. However, the NVLAP handbook will provide for a 
three-year accreditation period. If experience proves positive, the 3-
year accreditation period will be maintained, otherwise, it will be 
reduced to a shorter period. The on-site assessment will be conducted 
on a 2-year cycle with additional monitoring visits at random or to 
address specific problems called to NVLAP's attention.
Old Section 280.207 New Section 280.214--Conditions for Accreditation
    A fastener manufacturer, an automobile manufacturer, and a 
consultant requested the accreditation period be extended beyond one 
year. The accreditation period will be the same as for all other NVLAP 
accreditation programs.
    A fastener manufacturer requested removal of the requirement that a 
laboratory demonstrate, upon request by NVLAP, that it is able to 
perform tests representative of those for which it is seeking 
accreditation. This requirement has been maintained.
    A laboratory requested a limitation to the cost of accreditation. 
No change in the regulation was made. The Act specifies that sufficient 
fees be collected to cover the cost of the accreditation process.
    A fastener company requested that a laboratory must ``be capable of 
performing all tests for which it is accredited according to the latest 
version of the test method'' and delete an allowance of up to one year 
after publication, or another time limit specified by NVLAP. No change 
was made to the regulation.
    A laboratory requested that accredited laboratories be permitted to 
add tests without additional inspections and audits. No change in the 
regulation was made. The handbook describes the process for changing a 
laboratory's scope of accreditation. Specific circumstances will 
dictate the need for an additional on-site visit.
    A fastener manufacturer requested removal of the requirement to 
keep ``records of all actions taken in response to testing 
complaints,'' because Sec. 280.6 requires 5-year retention of all 
records. No change was made to this requirement.
Old Section 280.208 New Section 280.215--Criteria for Accreditation
    Eight commenters (an agency of the United States Government, an 
automobile manufacturer, a distributor, a consultant, 2 fastener 
manufacturers, a laboratory accreditation body and a law firm 
representing foreign manufacturers) requested that the criteria for 
accreditation follow ISO/IEC Guide 25 ``General Requirements for the 
Competence of Calibration and Testing Laboratories.'' NVLAP procedures 
cited in Sec. 280.201 are in full accordance with ISO/IEC Guide 25.
    A law firm representing foreign companies suggested this section 
conform to ISO/IEC Guides 54 and 55. These ISO/IEC documents pertain to 
accreditation bodies, not laboratories. Since this section provides 
criteria for laboratories and not accreditation bodies, no changes were 
made to the regulation.
    Several comments dealt with the requirements for a laboratory 
quality manual. A fastener manufacturer suggested that old 
Sec. 280.208(a)(1)(now Sec. 280.215(c)(1)) be changed to ``the Quality 
Manual in conjunction with other approved procedures must include as 
appropriate.'' This suggestion is taken care of in the existing NVLAP 
procedures.
    A laboratory accreditation body requested deletion in old 
Sec. 280.208(a) (now Sec. 280.215(c)) of the requirements that the 
quality manual contain provisions for meeting NVLAP

[[Page 50552]]

conditions for accreditation, provisions of the Fastener Quality Act, 
and quality assurance practices for test methods. This suggestion is 
taken care of in the existing NVLAP procedures.
    A laboratory accreditation organization requested that old 
Sec. 280.208(d)'s requirement (now Sec. 280.215(h)) for a calibration 
manual be replaced with section 9 of ISO/IEC Guide 25 and 280.208(e)'s 
requirement for a test plan be replaced with section 10 of ISO/IEC 
Guide 25. This suggestion is taken care of in the existing NVLAP 
procedures.
    A trade association requested that old Sec. 280.208(b)(6)(i)'s 
statement (now Sec. 280.215(b)(2)(ii)) that staff members are not to be 
subjected to undue pressure be deleted. The existing NVLAP procedures 
which follow ISO/IEC Guide 25 contain this requirement. ISO/IEC Guide 
25 also provides that the laboratory shall have policies to ensure that 
its personnel are free from any commercial, financial and other 
pressures which might adversely affect the quality and integrity of 
their work.
    A commenter from an agency of the United States Government 
requested that old Sec. 280.208(c) (now Sec. 280.215(f)) on facilities 
and equipment be modified to add a statement that: ``Equipment shall be 
of contemporary design and capability. The equipment shall be modern 
enough to require the minimum amount of operator interpretation or 
skill in determining the difference between a pass and fail condition 
of the product being tested.'' Existing NVLAP procedures require that 
the laboratory shall be furnished with all items of equipment 
(including reference materials) required for the correct performance of 
tests.
    A college professor requested that old Sec. 280.208(c) (3)(vi)'s 
requirements (now Sec. 280.215(f)(4)) for equipment records report 
variation between working and traceable instruments, and also report 
differences due to adjustments of working instrument. Existing NVLAP 
procedures require that equipment records be maintained to include 
dates and results of calibrations and/or verifications.
    A fastener manufacturer requested that old Sec. 280.208(d)(2) (now 
Sec. 280.215(h)) be changed to ``have a Calibration Manual, or 
equivalent.'' Existing NVLAP procedures require that the quality manual 
and related documentation shall contain reference to procedures for 
calibration, verification and maintenance of equipment.
    A fastener manufacturer requested deletion of provision in old 
Sec. 280.208(e) (1) and (2) (now Sec. 280.215(h)) to allow departure 
from test methods and procedures when necessary for technical reasons. 
This change has not been accepted.
    A consultant requested removal of the requirement to retain all 
original observations, calculations and derived data. Stating that it 
``is an unnecessary burden and serves no useful purpose. The final test 
report should stand on its own. If a laboratory has demonstrated 
proficiency in its various test procedures, there is no need for the 
above requirement.'' Existing NVLAP procedures follow the ISO/IEC Guide 
25 requirements on records which requires retention of original data.
    A trade association requested old Sec. 280.208(f)(2)'s reference 
(now Sec. 280.215(j)) to a ten-year record retention requirement for 
all records pertaining to tests, inspections and certifications be 
deleted, since it is already specified. This is covered in existing 
NVLAP procedures.
    A consultant requested that old Sec. 280.208(g)(3) (now 
Sec. 280.215(j)) pertaining to retention of supplemental information 
collected by a laboratory be deleted. This language has been removed 
from the regulation.
Old Section 280.209 New Section 280.208--Denying, Suspending and 
Revoking Accreditation
    A trade association requested that a specific provision be added to 
permit users to notify NVLAP of complaints, failures, etc. Users can 
report problems with a laboratory directly to NVLAP.
    NVLAP will follow-up with the laboratory to resolve such 
complaints.
Section 280.212--Approved Signatory
    Two fastener manufacturers and a trade association requested that 
authorized reproductions of the original signature of an Approved 
Signatory be permitted. The NVLAP handbook will provide guidance in use 
of an ``authorized'' signature of an Approved Signatory.

Subpart D--NIST Approval of Private Accreditation Programs

    NIST received nine comments stating that the proposed approval 
period for accreditation bodies of one year was too short, with 
suggested periods ranging from between two to six years or indefinite. 
The commenters included four manufacturers, one distributor, one 
testing laboratory, and two trade associations, and one individual. 
NIST agrees with this recommendation and the Program Handbook on 
Private Accreditation Programs now reflects this change. Accordingly, 
approvals will now be indefinite and old Sec. 280.305 has been deleted 
since renewals are no longer required. Subsequent sections in this 
subpart have been renumbered accordingly.
    NIST received a comment from a laboratory accreditation body that 
the requirement contained in Sec. 280.301(c)(17) was not in accordance 
with language contained in ISO/IEC Guide 58 with respect to assuring 
that accreditation bodies have formal rules and structures that will 
assure that senior executives, staff, and committees are free from any 
financial and other pressures which might influence the results of the 
accreditation process. NIST has changed the language to be in 
accordance with applicable provisions of ISO/IEC Guide 58. The new 
language is contained in Secs. 280.501(b)(1)(I) and (J).
    In addition, one government agency suggested that other Federal 
government agencies should be authorized to accredit laboratories for 
the purposes of the act. NIST notes that the Act does not provide for 
that authorization.

Subpart E--Recognition of Accreditation Programs

    NIST received thirteen comments on the procedures for the 
recognition of foreign accreditation bodies for testing under the 
Fastener Quality Act. The commenters consisted of five manufacturers, 
one user, three trade associations, two testing laboratories, one 
importer and one government agency. The common thread throughout the 
comments was the concern that foreign entities recognized by NIST 
should be held to the same standards demanded of U.S. laboratories and 
accreditors, and should not be subsidized by fees paid by domestic 
organizations. The suggestion was also made that international 
recognition agreements should be published in the Federal Register for 
public comment.
    In response to these comments, revisions have been made to subpart 
E to make clear that the principle of national treatment will apply; 
that is, all parties, regardless of country of origin will satisfy the 
same requirements and pay equivalent fees. NIST has, however, 
determined that publication of proposed international recognition 
agreements for comment is neither required by law nor appropriate.

Subpart F--Requirements for Fastener Laboratory Accreditation Bodies

    NIST received seven comments, one from a manufacturer, two from 
testing laboratories, one from a government agency, one from a foreign 
government, one from a trade association and one from an individual, 
stating that the

[[Page 50553]]

procedures and criteria contained in this subpart should be based on 
the most currently available international guides. In part, the 
regulations are based on ISO/IEC guides 54 and 55 which have been 
superseded by ISO/IEC Guide 58. In response to these comments, subpart 
F has been rewritten and is now based upon ISO/IEC Guide 25 and 58.

Subpart G--Enforcement

    This final rule consolidates the provisions of the proposed rule, 
subparts G, H and I, into a subpart G. As in the proposed rule, this 
final rule defines the conduct that constitutes violations of the Act 
and the regulations. However, instead of enumerating an exclusive list 
of acts prohibited by the Act and the regulations (as in subpart G of 
the proposed rule), this final rule provides that any conduct 
prohibited by the Act and regulations would be a violation of the Act 
and the regulations. Subpart G of this final rule also sets forth 
certain specific and general actions by persons subject to the Act and 
the regulations that can give rise to a charge that a violation has 
been committed.
    As in the proposed rule, this final rule provides an administrative 
process by which a person charged with violating the Act and the 
regulations is given notice and opportunity for a hearing before a 
civil penalty may be imposed. This final rule provides that the Office 
of Export Enforcement will initiate administrative enforcement 
proceedings and the Office of Chief Counsel for Export Administration 
will represent the Department in such proceedings before an 
administrative law judge.
    In response to the publication of the proposed rule, one commenter 
pointed out possible inconsistencies between the Act and the list of 
prohibited acts set out in Sec. 280.602 of the proposed rule.
    This commenter stated that language in Sec. 280.602(a), (b), (c), 
(g), (i) & (m) of the proposed rule would prohibit conduct beyond that 
intended by the Act. Language in those paragraphs would have prohibited 
the ``introduction (into commerce), delivery for introduction (into 
commerce), transportation or causing to be transported in commerce for 
the purpose of sale or delivery'' of fasteners that did not meet the 
requirements of Sections 5 or 7 of the Act. The commenter pointed out 
that, by such language, the regulations could apply to fasteners that a 
manufacturer of an end product produced in-house and shipped to a 
contractor for fabrication into a subassembly which the contractor then 
returned to the manufacturer for incorporation into a finished end 
product.
    We agree that the Act was not intended to cover such transactions. 
Subpart A of the final rule is consistent with sections 5 and 7 of the 
Act by making it a violation to do anything prohibited by the Act and 
this final rule. (See Sec. 280.602 of the final rule.) However, this 
does not mean, that, in all instances, the ``delivery * * * 
transportation or causing to be transported in commerce for the purpose 
of sale or delivery'' would be permissible. If any of these actions 
caused, aided, abetted a violation of the Act or regulations, or 
constituted solicitation, attempt or conspiracy to violate the Act or 
regulations, such conduct would be prohibited. (See Sec. 280.602(b), 
(c) and (d) of the final rule.)
    The same commenter pointed out that the language of Sec. 280.602(i) 
of the proposed rule omitted a condition required by section 7(b) of 
the Act. Section 280.602(i) of the proposed rule excepted imports from 
countries with which the United States has a free trade agreement from 
the requirement that imports be accompanied by a laboratory test 
report. However, Sec. 280.602(i) of the proposed rule failed to include 
the following condition contained in section 7(b) of the Act, namely:

    (That) the Secretary certif[y] that satisfactory arrangements 
have been reached by which purchasers within the United States can 
readily gain access to an original laboratory test report * * *.

    Section 280.13 of the final rule has corrected this omission by 
including the following requirement in paragraph (b)(1):

    (That) the Director has published in the Federal Register a 
certification that satisfactory arrangements have been reached by 
which purchasers within the United States can readily gain access to 
an original laboratory test report for such fasteners.

    Moreover, Sec. 280.602 of the final rule prohibits conduct that 
refrains from doing anything required by the Act and regulations. 
Therefore, a failure to provide the proper certificate of conformance 
to accompany imports, as required by section 7(b) of the Act and 
Sec. 280.13 and 280.602 of the regulations, would be a violation of the 
Act and regulations.
    The same commenter noted that the proposed rule provided specific 
time-periods within which responses to discovery requests must be made. 
That commenter recommended adopting the time-periods established in the 
Federal Rules of Civil Procedure, rather than the shorter time-periods 
set forth in the proposed rule.
    This final rule generally does not establish time periods for 
responses to discovery requests; rather, this final rule encourages the 
parties to engage in voluntary discovery and provides discretion to the 
administrative law judge in setting a time-period for responses to 
discovery, if formal discovery is requested. This final rule does 
require that the service of discovery requests be made at least 20 days 
prior to the scheduled date of the hearing, unless the administrative 
law judge specifies a shorter time period. This final rule also 
provides a minimum of 10 days for responses to requests for admissions 
of fact or law, although the administrative law judge may provide 
additional time for such responses. The Department believes that the 
flexibility for dealing with discovery provided by the final rule is 
preferable to the rigid response dates set forth in the Federal Rules 
of Civil Procedure.

Old Subpart H--Civil Penalties

    This subpart has been revised and consolidated into the new subpart 
G. NIST received no specific comments on subpart H of the regulations.

Old Subpart I--Hearing and Appeals Procedures

    This subpart has been revised and consolidated into the new subpart 
G. NIST received no specific comments on subpart I of the regulations.

Old Subpart J--Recordal of Insignia

    Subpart J has been redesignated as subpart H.

New Subpart H--Recordal of Insignia

    Two manufacturers suggested that any type of permanent marking, 
rather than just a raised or depressed insignia, as required by 
Sec. 280.900, be permitted for applying the recorded insignia on the 
fastener. Section 8 of the Act applies only to fasteners which by their 
standards and specifications must bear the manufacturer's or private 
label distributor's mark as a raised or depressed insignia. In those 
cases, the Act itself requires use of a raised or depressed insignia.
    Six comments were received on Sec. 280.700(b) of the proposed 
regulation. Two of these comments were from large end users of 
fasteners, one was from a manufacturer's association, one was from a 
government agency, and two were from manufacturers. These comments 
suggested that there is a conflict between Secs. 280.700(a) and 
280.700(b). Subsection 280.700(a) states that ``any fastener which is 
required by

[[Page 50554]]

the standards and specifications which it is manufactured to bear a 
raised or depressed insignia'' must bear a raised or depressed insignia 
identifying its manufacturer. Subsection 280.700(b) states that ``The 
manufacturer's, or private label distributor's, insignia must be 
applied to * * * any fastener which is sold or offered for sale.'' Thus 
the language in Sec. 280.700(b) encompasses a broader class of 
fasteners. In response to this comment, the language in 
Sec. 280.700(a), which tracks the statutory language, was added to 
Sec. 280.700(b).
    One professional organization suggested that Sec. 280.700(c) be 
amended to state that all insignia required by the Act be readable 
without magnification. In response, inasmuch as the Act covers 
fasteners which are \1/4\ inch in diameter, the PTO felt it was 
necessary to permit markings small enough to require magnification.
    One fastener organization, one manufacturer and one distributor 
suggested that the time periods for filing the maintenance document for 
the certificate of recordal set out in Sec. 280.720(a) be harmonized 
with the period for filing the renewal of the registration. In the view 
of the Patent and Trademark Office (PTO), a regulation which ensures 
that the renewal of the certificate of recordal and the trademark 
registration occur at the same time would be unduly complex. PTO would 
need to set out three renewal periods for fastener recordals, one for 
renewals of recordals based on trademark applications, one for renewals 
based on trademark registrations, and one for alphanumeric 
designations. In addition, the PTO would need to update its recordals 
to show the registration date of applications which mature into 
registrations. Accordingly, no change has been made to the regulation 
based upon these comments.
    The members of the Fastener Advisory Committee suggested that 
Sec. 280.723(d) be amended to permit the assignment of alphanumeric 
designations. In response, the section was rewritten to permit the 
assignment of alphanumeric designations upon notification to the 
Commissioner and re-application for the alphanumeric designation. The 
inability to assign alphanumeric designation would have created serious 
problems with unusable inventory if an ongoing business was purchased. 
The requirement that the Commissioner be notified of the assignment of 
the alphanumeric designation, and that a new application be filed in 
the name of the entity which purchases rights in the alphanumeric 
designation, will ensure that the traceability requirement of section 8 
of the Act is met.
    Two manufacturers and one professional organization suggested that 
the PTO recognize the fastener markings in MIL Handbook 57, NATO or 
CAGE codes, or the fastener markings listed with ASME, DISC or IFI. In 
response, PTO notes that the suggested listings contain identical marks 
used by different manufacturers. Therefore these listings do not meet 
the traceability requirements of section 8(b) of the Act.
    One government agency suggested that recordal of fastener insignia 
be permitted only to manufacturers not to private label distributors. 
Since the Act requires recordal of insignia both for manufacturers and 
private label distributors, no change to the regulation was made based 
upon this comment.
    One manufacturer suggested that the regulations be amended to 
permit sale of nonconforming fasteners, manufactured before the Act 
becomes effective, for a period of 5-10 years, to reduce the burden of 
imprinting a raised or depressed insignia on the fastener. Section 15 
of the Act makes the provisions of the Act applicable only to fasteners 
manufactured 180 days after final regulations are issued.
    One government agency suggested that the PTO add language to its 
regulations to clarify that a manufacturer may have an unlimited number 
of insignia recorded with the PTO. Another government department 
suggested that the regulations be amended to limit the number of 
insignia any private label distributor be allowed to have. The 
regulations, as presently written, do not limit the number of recorded 
insignia or alphanumeric designations a manufacturer or private label 
distributor may have. The PTO felt that each business should make its 
own determination as to how many recorded insignias it needed. The PTO 
did not feel it had sufficient expertise to determine a limit on the 
number of recorded insignias each business should be permitted.
    One writer suggested that, when a transfer or assignment includes 
the liabilities from previously manufactured products, the regulations 
permit the assignee to use the unaltered insignia of the assignor. In 
response, PTO notes that the regulations as presently written would 
permit the assignee to use the mark of the previous manufacturer or 
private label distributor, although the assignee would need a new 
certificate of recordal.

Comments on the Regulatory Impact Analysis

    NIST received comments on a wide array of issues concerning the 
draft Regulatory Impact Analysis (RIA) prepared in 1992, including 
comments on the percentage of fasteners that might be covered by the 
law, observations on the costs of laboratory testing, recordkeeping 
costs, nonconforming product costs, distributor costs, and so on. Each 
of these topics is treated in a separate section below. Additionally, 
NIST has prepared a final Regulatory Impact Analysis/Regulatory 
Flexibility Analysis that takes into account the 1996 amendments to the 
Act. Comments received as a result of the 1992 public comment process 
on the draft implementing regulations and as a result of subsequent 
Fastener Advisory Committee meetings have been taken into account in 
the preparation of the final Regulatory Impact Analysis.
Percentage of Fasteners Covered by the Law
    All comments received on the percentage of fasteners covered by the 
law indicated that coverage would exceed the congressional estimate of 
1 percent. One United States Senator, six distributors, three 
manufacturers, and two trade associations provided estimates ranging 
from 15 to 60 percent coverage with aerospace fastener industry 
estimates at the upper end of the range. Results from the Fastener 
Industry Coalition (FIC) Survey of distributors estimated the range of 
coverage from 5 percent to 100 percent, with an average of 54 percent.
Laboratory Accreditation/Testing Costs
    Several commenters suggested that some costs of testing have been 
omitted from the analysis. Four manufacturers noted that the economic 
impact analysis did not include the purchase cost or continued 
calibration cost of spectrographs ($100,000 to $200,000 per unit) or 
other equipment needed by many manufacturers who operate their own 
laboratories. Two manufacturers indicated that the cost of not allowing 
mill heat certifications had to be increased to include increased 
inventory costs and delivery/pickup costs to the nearest accredited 
lab. One distributor and one manufacturer noted that the cost of 
providing original copies of certifications (estimated at $15 to $35 
per certificate) should be included in the analysis. One distributor 
noted that foreign manufacturers may find it impossible to provide full 
certification for small lots of unusual items rushed into the U.S. by 
air, forcing companies

[[Page 50555]]

to set up testing laboratories in the United States to certify items.
    While two manufacturers agreed with the $35 per lot estimated 
spectrochemical testing cost, three manufacturers, one distributor, and 
one academician noted that the cost impact for spectrochemical analysis 
reflected the cost of only one element. Industry practice is to provide 
5 to 13 elements in a chemical analysis to more accurately reflect the 
material composition. Cost may therefore be 5 to 13 times higher than 
estimated. One distributor, while agreeing with the $35 estimate, noted 
that with very large lots, several tests may be required. One 
manufacturer estimated that testing costs (excluding spectrochemical 
testing) would be ten times the NIST estimate. Section 5 of the Act has 
been amended to permit fastener manufacturers to use mill heat 
certifications of chemistry supplied by metal producers instead of 
testing samples of finished fasteners for chemistry. Before the 
amendment to section 5, NIST estimated that it would cost the fastener 
industry $100.6 million annually in additional costs to conduct 
chemical tests of finished fasteners assuming 25% fastener coverage 
under the Act. The Fastener Advisory Committee, through its Cost 
Effectiveness Task Group, estimated a maximum range of between $28 
million to $1.9 billion in additional annual costs, with a more 
probable range of between $100 million to $286 million. With the 
amendment to section 5 of the Act, NIST projects that the increased 
tests costs to industry under the Act will remain at the $6 million 
level as indicated in the Summary of Adjusted Industry Costs provided 
below.
    One manufacturer estimated that the number of laboratories at the 
lower bound of the RIA estimate was too low. An estimate of 298-300 
manufacturers laboratories plus an additional 152-200 independent 
laboratories for offshore production and to cover manufacturers without 
laboratories would result in the need for a minimum of 450-500 
accredited laboratories. One manufacturer noted that most modern 
processing techniques, such as Just-in-Time, KanBan, etc., heavily 
influence the lot size downward, and the number of lots may be 
understated.
Production Delay Costs
    Four distributors/manufacturers and one auto maker indicated that 
because each lot must be tested and some tests are lengthy, ``just-in-
time'' production practices will have to be altered and very costly 
lot-by-lot product storage will be required which would increase the 
basic production cycle. Under a just-in-time inventory management 
policy, assembly operations may have to shutdown pending completion of 
testing. NIST has discussed this issue with the fastener industry. It 
relates to certain types of testing such as salt spray tests where the 
amount of time to conduct the test involves days or weeks. These types 
of tests are generally not required by the standards and specifications 
to be carried out on every lot of fasteners. Moreover, NIST feels that 
prudent inventory control and efficient scheduling of tests by 
manufacturers and distributors will alleviate shutdowns in assembly 
operations.
Recordkeeping Costs
    One manufacturer indicated that the recordkeeping requirements of 
the proposed regulations may go beyond what laboratories presently 
keep. If records of each inspection, calculations made in the 
laboratory, etc., must be maintained in addition to the test 
certificate there will be a major increase in costs. The Fastener 
Advisory Committee has indicated to NIST that laboratories currently 
involved in testing fasteners keep records that are very close to those 
required by the regulations.
    One manufacturer, one distributor, and one foreign trade 
association noted that the time required for signing a test report 
should include time for report review. Estimated time ranged from 2-20 
minutes. Additional review time will be required if test reports are 
reviewed more thoroughly after the regulation is implemented.
Training/Education Costs
    Two distributors noted that increased training and supervision of 
personnel will be required to insure compliance and that training/
information on the requirements of the Act would also have to be 
provided to foreign suppliers. NIST has been working with the fastener 
industry to organize a series of public workshops both in the U.S. and 
abroad to provide training on the Act and regulations, once the 
regulations are issued. Eight such workshops have been planned, and 
most will coincide with already planned meetings and conferences within 
the fastener industry so as to minimize costs. NIST does not feel that 
the cost of training and education needed to assure compliance with the 
Act and regulations will be significant.
Imported Assemblies Containing Fasteners
    Two manufacturers and one manufacturer/distributor noted the Act 
allows foreign competitors to produce fasteners without additional 
costs imposed by the Act and put them into automotive and other 
products which are then imported by U.S. based firms as final products 
or subassemblies. This will put U.S. firms producing similar items at a 
competitive disadvantage. NIST accepts the comments that imported 
assemblies or final products containing fasteners might have a slight 
competitive advantage over U.S. assemblies or final products containing 
fasteners manufactured in compliance with the Act and regulations. 
However, NIST feels that there are many other influence factors such as 
cost of materials, labor, and currency fluctuations that could mitigate 
any competitive advantage and that it is not realistic to claim that 
the cost of fasteners alone will result in a competitive disadvantage 
to U.S. firms.
Nonconforming Product Costs
    Eleven manufacturers, four distributors, and one importer commented 
on the major economic impact of not allowing minor nonconformances that 
do not affect the form, fit or function of a fastener. While no cost 
estimates were provided, comments indicated that total manufacturing 
cost will be significantly affected and may result in shutdown of a 
substantial number of firms. ``Just-in-time'' production practices and 
worldwide parts sourcing will also be affected and could cause 
temporary plant shutdowns.
    The Fastener Advisory Committee at its meeting of December 2, 1992 
requested its Subcommittee on Cost Effectiveness to prepare a ``white 
paper'' projecting the probable economic consequence of implementing 
final regulations without amending the Act per the Committee's 
recommendations. The report focused on three issues: (1) Permitting the 
sale of fasteners tested and found to contain minor nonconformances 
from standards which do not affect form, fit, or function; (2) 
permitting the acceptance of mill heat certificates from raw material 
suppliers rather than post manufacturing testing of finished fasteners; 
and (3) permitting the commingling of like fasteners by distributors. A 
report was produced by the Subcommittee and adopted by the full 
Committee at its meeting March 3-4, 1993. On the issue of nonconforming 
product costs, the Report estimates that fastener lot rejection costs 
will range

[[Page 50556]]

from $89 million to $285 million annually unless nonconformances now 
recognized in existing standards prevail. The Report further noted that 
such rejection costs will double when parts are plated because of the 
wide swings in coating thickness present in the existing process.
    Section 3 of the Act was amended to permit the sale of fasteners 
with minor non-conformances following guidelines established in 
applicable standards and specifications. The amendment resolves the 
non-conforming fasteners issue and will eliminate the $285 million 
worst case projected costs to industry, as estimated above.
Distributor Costs
    One distributor noted that there can be no standard cost of impact 
developed that would safely apply to each and every distributor. 
Factors affecting impact include the size of the distributorship and 
whether it's mostly a bulk operation, a prepackaged operation, a 
repackaging operation or a combination of the above. Smaller 
distributors would probably be harder hit because they tend to be more 
combination operations with a lesser quantity but wider variety of 
products and with much smaller unit sales, which includes broken kegs, 
carton or package sales. Cost impact estimates provided by individual 
distributors on their operations ranged from no or minimal additional 
cost to increases of several hundred thousand dollars the first year. 
The Fastener Industry Coalition (FIC) Cost Survey indicated wide 
variations in costs likely to be incurred by specific companies. The 
survey noted that 50 percent of respondents will require additional 
warehouse space and that first year costs would range from $1,500 to 
$500,000 and average=$50,966 with subsequent annual costs ranging from 
$1,000 to $78,000 and averaging $16,604. The survey noted that 85 
percent of respondents would require additional personnel. Estimated 
cost ranged from $4,000 to $170,000 and averaged $36,444. Eighty-one 
percent of respondents would require additional computer hardware/
software. Estimated first year cost ranged from $500 to $175,000 and 
averaged $24,821. Seventy four percent would require additional 
machinery, equipment, pallet racking, shelving, or supplies. Estimated 
first year cost ranged from $500 to $150,000 and averaged $15,326. The 
FIC Survey also noted other costs including: Labels for boxes; probable 
loss of old uncertified stock or certification costs to recertify it; 
maintenance and certification of quality control equipment and purchase 
of additional equipment and quality control personnel; additional 
recordkeeping and storage requiring cabinets and personnel; reduced 
efficiency in receiving, shipping, materials handling, etc.; cost of 
providing test reports to customers; increased inventory costs; 
transportation cost to test lab; test costs; changing vendors because 
some will drop out; cost of goods that must be scrapped; loss of stock 
due to non-commingling; cost of test reports from vendor ($5-$100 per 
lot); and additional attorney fees/insurance premiums.
    Section 7(e) of the Act was amended to permit voluntary commingling 
of fasteners by distributors only. NIST estimates that approximately 
10% of distributors will continue to provide lot traceability at an 
estimated annual cost to the industry of $6.5 million instead of the 
projected $373.3 million annual cost if all distributors were required 
to maintain lot traceability for 25% of their inventory. Note that the 
$6.5 million does not necessarily represent new costs since some 
distributors had been providing this service prior to the passage of 
the Fastener Quality Act.
Reduced Competition
    Six distributors, seven manufacturers and two laboratories noted 
that compliance/accreditation costs and liability issues are likely to 
drive firms out of the market thus reducing competition. NIST's 
assessment of economic impact has shown no evidence of burdensome 
compliance/accreditation, and liability issue-related costs.
Loss of Good Will
    Five distributors and one manufacturer noted that one of the most 
important costs will be loss of customer goodwill resulting from firms 
not being able to accept customer returns and from customers having to 
purchase more product than they actually need because breaking packages 
will not be cost effective. This problem can be minimized using normal 
industry practice of inventory control. The Act does not prevent the 
current practice of return of unused, unbroken boxes of fasteners.
Lack of Enforcement
    Three distributors, three manufacturers, and one trade association 
indicated that those producing/distributing poor quality fasteners will 
continue to do so to the extent that lack of enforcement makes that 
risk attractive. Several noted that there were already laws in effect 
to deal with the mismarked or counterfeit fasteners, but that they were 
not being sufficiently enforced. The Bureau of Export Administration 
(BXA) of the Commerce Department has 140 experienced field 
investigators who will actively enforce this Act.

Miscellaneous Comments

    One distributor noted that the regulatory impact is a non-issue 
since costs of product failures are so large. Primarily, this Act 
addresses the issue of improving the quality and traceability of 
fasteners, thereby decreasing fastener-related failures.
    One manufacturer stated that if commingling is allowed what is to 
stop someone from mixing good certified product with bogus, uncertified 
product in the same container? The Act specifically addresses who can 
commingle fasteners and how to label commingled fasteners. See subpart 
A, Sec. 280.4 of the regulations.
    One distributor noted that if a manufacturer can create bogus 
fasteners, creating bogus test reports will not be a problem either. 
The Act imposes severe criminal penalties for creating either bogus 
fasteners or bogus test reports. See Subpart G, Sec. 280.603 of the 
regulations.
    One manufacturer noted that expected potential benefit resulting 
from decreased buyer inspection and testing cost is not anticipated in 
the aerospace industry. The Act is not intended to change the current 
practice of buyer inspection and testing in the aerospace industry.

Classification

Administrative Procedure Act

    This final rule is the logical outgrowth of the proposed rule and 
the public comment process. A majority of the public comment received 
on the 1992 proposed rule suggested the need for particular amendments 
to the FQA. The suggested amendments were enacted as part of Pub.L. 
104-113. This rule contains regulations making final the 1992 proposed 
rule, as well as regulations to implement expressly the FQA as amended 
pursuant to specific public comment received regarding the 1992 
proposed rule.

Executive Order 12866

    This rule has been determined to be significant under section 3(f) 
of Executive Order 12866. However, it has been determined that this 
rule is not an economically significant rule within the meaning of 
section 3(f)(1) of Executive Order 12866, or a major rule as defined by 
section 804 of Pub.L. 104-121, based upon the adjusted costs to 
industry of

[[Page 50557]]

complying with the Fastener Quality Act as amended by Pub.L. 104-113 
(Technology Transfer and Advancement Act of 1995). The projected $18.9 
million annual costs to industry summarized below are based upon NIST's 
estimate that 25% of currently produced fasteners would be covered 
under the Act. Assuming that 55% of currently produced fasteners would 
be covered under the Act, as is projected in industry studies, the 
estimated annual industry costs adjusted by amendments to the Act would 
be approximately $38.7 million. NIST has prepared a final Regulatory 
Impact Analysis on the expected costs that will be incurred by both 
government and industry to implement these regulations, as well as on 
the expected benefits to be derived from the rule's implementation. 
NIST has transmitted this Analysis to the Office of Management and 
Budget.

Summary of Adjusted Industry Costs

    The following table summarizes the annual costs to industry for 
complying with the Fastener Quality Act, as originally estimated in the 
1993 NIST Impact Analysis, and as adjusted based upon the recent 
amendments to the Act that were contained in Pub.L. 104-113 (Technology 
Transfer and Advancement Act of 1995).

                        Estimated Industry Costs                        
                              [In millions]                             
------------------------------------------------------------------------
                                                               Adjusted 
                                                    With no       by    
                    Activity                      amendments  amendments
                                                    to act      to act  
------------------------------------------------------------------------
Lab Accreditation Costs.........................       $6.4        $6.4 
Increased Test Costs............................        6.0         6.0 
Nonconforming Fastener Costs*...................        N/A         0.0 
Spectrochemical Test Costs......................      100.6         0.0 
Distributor Costs...............................      373.7      ** 6.5 
                                                 -----------------------
    Total Annual Industry Cost..................      486.7       18.9  
------------------------------------------------------------------------
* NIST was not able to estimate these costs. However, a task force of   
  the Fastener Advisory Committee estimated lot rejection costs based   
  upon not being able to sell fasteners with minor nonconformances as   
  permitted by standards and specifications at $285 million annually,   
  worst case.                                                           
** The $6.5 million does not necessarily represent all new costs since  
  some distributors had been providing this service prior to the passage
  of the Fastener Quality Act.                                          

Summary of Benefits of the Regulation

    The economic costs associated with faulty or substandard fasteners 
entering the marketplace are difficult to measure. In the legislative 
history of the Act, numerous examples were cited of faulty or 
substandard fasteners. The one example that was quantified--the NASA 
space shuttle equipment example--included an estimated $11 million 
price tag associated with the discovery and removal of substandard 
fasteners. It is also clear from the other examples included in the 
legislative history, that many (if not most) of them resulted in 
economic losses well into the millions of dollars--losses that will be 
substantially reduced through implementation of this Act. In addition 
to economic losses, the injuries and deaths associated with product 
failures resulting from the use of faulty or counterfeit fasteners will 
be reduced. Another benefit will be a potential reduction in the 
inspection and testing costs incurred by purchasers associated with the 
quality control of incoming critical fastener procurements. Similarly, 
another benefit, although not quantifiable, is associated with customer 
perception of improved product quality for U.S. made fasteners 
resulting from the Act. Because the Act applies equally to all 
enterprises in the United States, be they domestic or foreign, 
implementation of the Act will also help to ``level the playing field'' 
in domestic sales by making it more difficult for unethical 
manufacturers and distributors to substitute substandard or counterfeit 
fasteners at ``reduced prices'' thereby being able to undercut the 
prices of their competitors. Finally, the Act uses voluntary standards 
developed by the private sector to set appropriate fastener 
specifications and test methods. This approach, which complies with the 
requirements of the Technology Transfer and Advancement Act of 1995, 
reduces the degree of regulatory involvement in and control over the 
marketplace and leaves the determination of fastener requirements to 
those most familiar with fastener technology and use.

Regulatory Flexibility Act

    The Department has conducted a final Regulatory Flexibility 
Analysis for this final rule. Laboratories, most of which are small 
entities, desiring to test fasteners in accordance with the provisions 
of the Act will incur costs related to accreditation and recordkeeping. 
These costs have been discussed in Section IV of the Regulatory Impact 
Analysis under LABORATORY COSTS. Based on estimates provided by the 
Fastener Advisory Committee, between 328 and 457 laboratories will 
require accreditation to implement Pub. L. 101-592, as amended. Using 
the 1 to 25 percent range, between 26 and 639 laboratories will require 
accreditation. Accreditation cost per laboratory will vary with the 
scope of accreditation sought (the number of test methods for which the 
laboratory seeks accreditation); however, the annual accreditation cost 
(based on NVLAP's experience) is expected to average $10,000 per 
laboratory.
    Manufacturers who sell grade-marked fasteners covered by the Act 
will incur additional testing and recordkeeping costs. Most of the 
approximately 350 U.S. fastener manufacturers are not small entities. 
No data is available on how many (if any) small U.S. fastener 
manufacturers produce fasteners covered by the Act. Manufacturer costs 
for all manufacturers are discussed in Section IV of the Regulatory 
Impact Analysis under MANUFACTURER COSTS and in the June 1996 update to 
the Analysis.
    Distributors that sell grade-marked fasteners covered by the Act 
will also incur additional costs in supplying lot traceable fasteners 
to those purchasers who request them. These costs are discussed in the 
June 1996 update to the original 1993 Regulatory Impact Analysis.
    As noted above, to the extent that the Act permitted some 
flexibility in the development of the implementing regulations, the 
Department has sought and incorporated advice from its Fastener 
Advisory Committee, chartered pursuant to the Act, to maximize the cost 
effectiveness of the regulations.
    Responses to comments are contained elsewhere in this rule and this 
is thought to minimize the significant impact of this rulemaking 
through enactment of amendments to the Act, as described above.

Paperwork Reduction Act

    This rule contains three information collection requirements 
subject to the Paperwork Reduction Act. Two collections of information 
have been approved by the Office of Management and Budget under Control 
Numbers 0693-0003, and 0693-0015. The public reporting burden for 
collecting information dealing with the accreditation of fastener 
testing laboratories (0651-0003) is estimated to average 1 hour per 
response, and an estimated total annual burden of 2400 hours. The 
public reporting burden for collecting information dealing with 
approving laboratory accreditation bodies (0651-0015) is estimated to 
average 4 hours per response, with an estimated total annual burden of 
20 hours.

[[Page 50558]]

    The final rule contains one information collection provision that 
is subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The title, 
description, and respondent description of the information collection 
requirements are shown below with the estimate of the annual reporting 
and recordkeeping burden. Included in the estimate is the time for 
reviewing instruction, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Title: Fastener Quality Act Insignia Recordal Process.
    Description: This collection of information is required by section 
8 of the Fastener Quality Act. Under section 8, each manufacturer or 
private label distributor must apply to PTO for recordal of an insignia 
on the Fastener Insignia Register. The PTO has drafted a suggested 
application form for use by the public.
    Description of Respondents: Fastener manufacturers and private 
label distributors.
    Estimate of Annual Reporting and Recordkeeping Burden: The 
estimated total annual burden of hours is calculated at 100 hours. PTO 
estimates that there will be between 300 and 900 respondents, or an 
average of 600 respondents per year. The Office estimates that it will 
take the applicant 10 minutes to collect the data and complete the 
application/renewal form.
    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 unless that collection of information 
displays a currently valid OMB Control Number.

List of Subjects in 15 CFR Part 280

    Business and industry, Fastener industry, Imports.

    Dated: September 13, 1996.
Samuel Kramer,
Associate Director.
    For reasons set forth in the preamble, title 15 of the Code of 
Federal Regulations is amended by adding part 280 to read as follows:

PART 280--FASTENER QUALITY

Subpart A--General

Sec.
280.1  Purpose/description of rule.
280.2  Definitions.
280.3  Relationship to State laws.
280.4  Commingling of fasteners.
280.5  Certification of fasteners.
280.6  Laboratory test reports.
280.7  Recordkeeping requirements.
280.8  Ownership of laboratories by manufacturers.
280.9  Subcontracting of testing.
280.10  Sampling.
280.11  Significant alterations of fasteners.
280.12  Applicability.
280.13  Imports of fasteners.
280.14  Option for importers and private label distributors.
280.15  Alternative procedure for chemical characteristics.
280.16  Subsequent purchaser.

Subpart B--Laboratory Accreditation

280.100  Introduction.
280.101  Accredited laboratory list.
280.102  Procedures for inclusion in the accredited laboratory list.
280.103  Removal from the accredited laboratory list.

Subpart C--NIST Fastener Laboratory Accreditation Procedures

280.200  Introduction.
280.201  Applicability of part 285, title 15, Code of Federal 
Regulations.
280.202  Establishment of the program.
280.203  Adding to or modifying the program.
280.204  NVLAP Program Handbook.
280.205  Applying for accreditation.
280.206  Assessing and evaluating a laboratory.
280.207  Granting and renewing accreditation.
280.208  Denying, suspending and revoking accreditation.
280.209  Voluntary termination of accreditation.
280.210  Change in status of laboratory.
280.211  Authorized representative.
280.212  Approved signatory.
280.213  Application of accreditation conditions and criteria.
280.214  Conditions for accreditation.
280.215  Criteria for accreditation.

Subpart D--NIST Approval of Private Accreditation Programs

280.300  Introduction.
280.301  Application.
280.302  Review and decision process.
280.303  Criteria for approval.
280.304  Maintaining approved status.
280.305  Voluntary termination of approval.
280.306  Involuntary termination of approval by NIST.

Subpart E--Recognition of Foreign Laboratories

280.400  Introduction.
280.401  Recognition of foreign laboratories.
Subpart F--Requirements for Fastener Laboratory Accreditation Bodies
280.500  Introduction.
280.501  Accreditation body.
280.502  Laboratory assessors.
280.503  Accreditation process.
280.504  Relationship between approved/recognized accreditation body 
and laboratory.

Subpart G--Enforcement

280.600  Scope.
280.601  Definitions used in this subpart.
280.602  Violations.
280.603  Penalties, remedies and sanctions.
280.604  Administrative enforcement proceedings.
280.605  Institution of administrative enforcement proceedings.
280.606  Representation.
280.607  Filing and service of papers other than charging letter.
280.608  Answer and demand for hearing.
280.609  Default.
280.610  Summary decision.
280.611  Discovery.
280.612  Subpoenas.
280.613  Matter protected against disclosure.
280.614  Prehearing conference.
280.615  Hearings.
280.616  Interlocutory review of rulings.
280.617  Proceeding without a hearing.
280.618  Procedural stipulations; extension of time.
280.619  Decision of the administrative law judge.
280.620  Settlement.
280.621  Reopening.
280.622  Record for decision and availability of documents.
280.623  Appeals.

Subpart H--Recordal of Insignia

280.700  Recorded insignia required prior to offer for sale.

The Written Application

280.710  Applications for insignia.
280.711  Review of the application.
280.712  Certificate of recordal.
280.713  Recordal of additional insignia.

Post-recordal Mainenance

280.720  Maintenance of the certificate of recordal.
280.721  Notification of changes of address.
280.722  Transfer or amendment of the certificate of recordal.
280.723  Transfer or assignment of trademark registration or 
recorded insignia.
280.724  Change in status of trademark registration or amendment of 
the trademark.
280.725  Cumulative listing of recordal information.
280.726  Records and files of the Patent and Trademark Office.

    Authority: Sec. 13 of the Fastener Quality Act (Pub.L. 101-592, 
as amended by Pub. L. 104-113).

Subpart A--General


Sec. 280.1  Purpose/description of rule.

    The Fastener Quality Act (the Act) (Pub.L. 101-592, as amended by 
Pub. L. 104-113) is intended to protect the public safety, to deter the 
introduction of nonconforming fasteners into commerce, to improve the 
ability to trace fasteners covered by the Act, and generate greater 
assurance that fasteners meet stated specifications. The Act:
    (a) Requires that certain fasteners which are sold in commerce 
conform to the specifications to which they are represented to be 
manufactured,

[[Page 50559]]

    (b) Provides for accreditation of laboratories engaged in fastener 
testing; and
    (c) Requires inspection, testing and certification, in accordance 
with standardized methods, of fasteners covered by the Act.


Sec. 280.2  Definitions.

    Unless the context requires otherwise or unless specifically stated 
the terms in this part have the meanings prescribed in the statute. In 
addition the following definitions apply.
    Accreditation means laboratory accreditation.
    Accreditation Body refers to the National Voluntary Laboratory 
Accreditation Program and those private entities currently approved by 
NIST under subpart D of this part and those foreign governments or 
organizations currently recognized by NIST under subpart E of this 
part.
    Accreditation criteria means a set of requirements used by an 
accreditation body which a laboratory must meet to be accredited.
    The Act means the Fastener Quality Act (Pub.L. 101-592, as amended 
by Pub.L. 104-113).
    Alter means to alter by through hardening; by electroplating of 
fasteners; or by machining.
    Alteror means a person who owns a fastener and causes it to be 
altered.
    Approved signatory is an individual employed by a laboratory 
accredited under the Act and these regulations who is recognized by an 
accreditation body as competent to sign accredited laboratory test 
reports.
    Bureau of Export Administration or (BXA) means the Bureau of Export 
Administration of the United States Department of Commerce, including 
the Office of Export Enforcement.
    Certificate of Accreditation is a document issued by an 
accreditation body to a laboratory that has met the criteria and 
conditions of accreditation. The certificate, together with the 
assigned code number, and scope of accreditation issued by the 
accreditation body may be used as proof of accredited status.
    Commingling means the mixing of fasteners from different lots in 
the same container.
    Commissioner means the Commissioner of Patents and Trademarks.
    Consensus standards organization means the American Society for 
Testing and Materials (ASTM), American National Standards Institute 
(ANSI), American Society of Mechanical Engineers (ASME), Society of 
Automotive Engineers (SAE), or any other consensus standards setting 
organization (domestic or foreign) determined by the Secretary to have 
comparable knowledge, expertise, and concern for the health and safety 
in the field for which such organization purports to set standards.
    Container means any package of fasteners traded in commerce.
    Date of manufacture means that date upon which the initial 
conversion of material into a fastener takes place.
    Director means the Director of the National Institute of Standards 
and Technology (NIST).
    Fastener means any screw, nut, bolt or stud, washer or other item 
included within the definition for fastener contained in section 3(5) 
of the Fastener Quality Act. The term ``fastener'' does not include a 
screw, nut, bolt, or stud:
    (1) That is produced and marked as ASTM A307 Grade A;
    (2) That is produced in accordance with ASTM F432; or
    (3) That is held out as being produced to other than the provisions 
of standards and specifications published by a consensus standards 
organization, or a government agency.
    A screw, nut, bolt, stud or washer held out as being produced 
according to requirements of a document other than a document published 
by a consensus standards organization is a fastener within the meaning 
of the Act and this part if that document incorporates or references 
(directly or indirectly) standards and specifications published by a 
consensus standards organization or government agency for purposes of 
delineating performance or materials characteristics of the fastener.
    Fastener insignia register means the register established at the 
U.S. Patent and Trademark Office for the recordal of fastener insignia 
to identify the manufacturer or private label distributor.
    Fastener set means a collection of small quantities of products, 
including fasteners, of varying sizes, collected together and sold as a 
package.
    Grade or property class identification marking means any symbol 
appearing on a fastener purporting to indicate that the fastener's base 
material, strength properties, or performance capabilities conform to a 
specific standard of a consensus standards organization or government 
agency. A raw material mark is not considered as a grade identification 
mark for purposes of these regulations unless this mark is required by 
the fastener standards and specifications to identify specific 
conformance.
    Importer means a person located within the United States who 
contracts for the initial purchase of fasteners manufactured outside 
the United States for resale or such person's use within the United 
States.
    Laboratory accreditation is the formal recognition that a testing 
laboratory is competent to carry out specific test(s) or specific 
type(s) of tests.
    Laboratory accreditation body means a legal or administrative 
entity that accredits laboratories.
    Laboratory assessment means the on-site examination of a testing 
laboratory to evaluate its compliance with specified criteria.
    Laboratory test report means a report prepared by an accredited 
laboratory in accord with Sec. 280.6.
    Lot means a quantity of fasteners of one part number fabricated by 
the same production process from the same coil or heat number of metal 
as provided by the metal manufacturer and submitted for inspection and 
testing at one time.
    Lot number means a number assigned by a manufacturer to the lot.
    Lot-specific identification information means information 
applicable to a fastener consisting of, at a minimum:
    (1) The part number (or a part description if there is no 
applicable part number),
    (2) The identity of the manufacturer, and
    (3) The lot number.
    Lot traceability means the recording and maintenance of lot-
specific identification information sufficient to trace fasteners from 
a single lot throughout:
    (1) The manufacturer's fabrication or alteration process,
    (2) All inspection and testing operations, and
    (3) The subsequent chain of distribution in commerce.
    Manufacturer means a person who fabricates fasteners, who 
significantly alters fasteners, or who alters any item so that it 
becomes a fastener.
    NIST means the National Institute of Standards and Technology, U.S. 
Department of Commerce.
    NVLAP means the National Voluntary Laboratory Accreditation Program 
operated by the National Institute of Standards and Technology.
    Original laboratory testing report means a laboratory testing 
report which is originally signed by an approved signatory or is a copy 
thereof, certified by the laboratory that conducted the test.
    Person means any individual, partnership, limited partnership or 
corporate entity and/or a representative, agent or designee.
    Private label distributor means a person who contracts with a

[[Page 50560]]

manufacturer for the fabrication of fasteners bearing the distributor's 
distinguishing insignia.
    Product includes any type or category of manufactured goods, 
constructions, installations, or natural or processed materials.
    Proficiency testing means the determination of laboratory testing 
performance by means of comparing and evaluating tests on the same or 
similar items or materials in accordance with predetermined conditions.
    Scope of Accreditation is a document issued by an accreditation 
body to an accredited laboratory which lists the test methods, 
standards or specifications for which the laboratory is accredited.
    Secretary means the Secretary of Commerce.
    Significantly Alter means to alter in a manner which could weaken 
or otherwise materially affect the performance or capabilities of the 
fastener as it was originally manufactured, grade or property class 
marked, tested, or represented. The term does not include the 
application of adhesives or sealants, locking elements, provisions for 
lock wires, coatings and platings of parts having a specified Rockwell 
C hardness of less than 32, or cutting off of fasteners. The cutting of 
finished threaded rods, bars or studs to produce individual smaller 
length threaded studs for resale is not a significant alteration. 
However, cut threaded studs, rods, and bars offered for sale shall be 
individually marked with the grade or property class identification 
marking appearing on or accompanying the original threaded studs, rods, 
and bars from which the fasteners were cut.
    Standards and specifications means the provisions of a document 
published by a consensus standards organization, or a government 
agency.
    Tamper-resistant system means the use of special paper or embossing 
stamps or other controls which discourage, prevent or minimize 
alteration of test reports subsequent to manufacturing, inspection and 
testing.
    Testing laboratory is a laboratory which measures, examines, tests, 
calibrates or otherwise determines the characteristics or performance 
of products.
    Through-harden means heating above the transformation temperature 
followed by quenching and tempering for the purpose of achieving a 
uniform hardness.
    Traceability of Measurements means a documented chain of 
comparisons connecting the accuracy of a measuring instrument to other 
measuring instruments of higher accuracy and, ultimately, to a primary 
standard.


Sec. 280.3  Relationship to State laws.

    Nothing in the Act or these regulations shall be construed to 
preempt any rights or causes of action that any buyer may have with 
respect to any seller of fasteners under the law of any State, except 
to the extent that the provisions of the Act or these regulations are 
in conflict with such State law.


Sec. 280.4  Commingling of fasteners.

    (a) No manufacturer, importer, or private label distributor may 
commingle fasteners of the same type, grade, and dimension from 
different lots in the same container; except that such manufacturer, 
importer, or private label distributor may commingle fasteners of the 
same type, grade, and dimension from not more than two tested and 
certified lots in the same container during repackaging and plating 
operations: Provided, that any container which contains the fasteners 
from two lots shall be conspicuously marked with the lot identification 
numbers of both lots.
    (b) Fastener distributors, and persons who purchase fasteners for 
sale at wholesale or retail, may commingle fasteners of the same type, 
grade, and dimension from different lots in the same container.


Sec. 280.5  Certification of fasteners.

    (a) No fastener shall be offered for sale or sold in commerce 
unless it is part of a lot which has been inspected, tested, and 
certified in accordance with Section 5 of the Act and this part, and 
found to conform to the standards and specifications to which the 
manufacturer represents it has been manufactured.
    (b) (1) the requirements of paragraph (a) of this section shall not 
apply to fasteners which are part of a lot of 50 fasteners or less if 
within 10 working days after delivery of such fasteners, or as soon as 
practicable thereafter--
    (i) Inspection, testing, and certification as provided in 
subsections 5 (b), (c), and (d) of the Act and this part is carried 
out; and
    (ii) Written notice detailing the results of such inspection, 
testing, and certification is sent:
    (A) To all purchasers of such fasteners, except retail sellers and 
retail consumers, and
    (B) To any retail seller or retail consumer who, prior to delivery, 
requests such written notice.
    (2) If a fastener is sold under paragraph (b) of this section, each 
purchaser of such fastener, except for retail sellers and retail 
consumers unless such retail sellers and retail consumers request such 
notice in advance, shall be provided, contemporaneously with each sale 
and delivery, written notice stating that such fastener has not yet 
been inspected, tested, and certified as required by the Act and this 
part.
    (c) Each manufacturer, importer, private label distributor, or 
alteror who significantly alters any fastener shall keep on file and 
make available for inspection in accordance with the recordkeeping 
requirements of Sec. 280.7 an original laboratory testing report 
described in section 5(c) of the Act and Sec. 280.6 of this part and a 
manufacturer's certificate of conformance for each lot of fasteners 
subject to the Act and this part which that manufacturer, importer, 
private label distributor, or alteror who significantly alters any 
fastener offers for sale or sells in commerce. Such certificate shall, 
as a minimum, include: Fastener description information contained in 
Sec. 280.6(a)(4) of this part; the date of issue and serial number of 
the laboratory testing report; and
A statement certifying that the fasteners have been manufactured 
according to the requirements of the applicable standards and 
specifications and found to conform with its requirements. The 
requirements of this paragraph shall not apply to an alteror who 
significantly alters fasteners and who delivers to the purchaser the 
written statement provided for by Sec. 280.11(a)(3) of this part.


Sec. 280.6  Laboratory test reports.

    (a) When performing tests for which they are accredited under this 
part, each laboratory accredited under subparts C, D, or E of this part 
and currently listed in the Accredited Laboratory List shall issue test 
reports of its work which accurately, clearly, and unambiguously 
present the test conditions, test set-up, test results, and all 
information required by this section. All reports must be in English or 
be translated into English, must be signed by an approved signatory, 
must be protected by a tamper resistant system, and contain the 
following information:
    (1) Name and address of the laboratory;
    (2) Unique identification of the test report including date of 
issue and serial number, or other appropriate means;
    (3) Name and address of client;
    (4) Fastener Description, including:
    (i) Manufacturer (name and address);
    (ii) Product family (screw, nut, bolt, washer, or stud), drive and/
or head configurations as applicable;

[[Page 50561]]

    (iii) Date of manufacture;
    (iv) Head markings (describe or draw manufacturer's recorded 
insignia and grade identification or property class symbols);
    (v) Nominal dimensions (diameter; length of bolt, screw or stud; 
thickness of load bearing washer); thread form and class of fit;
    (vi) Product standards and specifications related to the laboratory 
in writing by the manufacturer, importer or distributor;
    (vii) Lot number;
    (viii) Specification and grade of material;
    (ix) Coating material and standard and specification as applicable;
    (5) Sampling information:
    (i) Standards and specifications or reference for sampling scheme;
    (ii) Production lot size and the number sampled and tested;
    (iii) Name and affiliation of person performing the lot sampling;
    (6) Test results:
    (i) Actual tests required by the standard and specification;
    (ii) Test results for each sample;
    (iii) All deviations from the test method;
    (iv) All other items required on test reports according to the test 
method;
    (v) Where the report contains results of tests performed by sub-
contractors, these results shall be clearly identified along with the 
name of the laboratory and accreditation information listed in 
paragraph (a)(10) of this section.
    (vi) A statement that the samples tested either conform or do not 
conform to the fastener standards and specifications or standards and 
identification of any nonconformance, except as provided for in 
Secs. 280.13 and 280.14;
    (7) A statement that the report must not be reproduced except in 
full;
    (8) A statement to the effect that the test report relates only to 
the item(s) tested;
    (9) Name, title and signature of approved signatory accepting 
technical responsibility for the tests and test report;
    (10) The name of the body which accredited the laboratory for the 
specific tests performed which are the subject of the report, and code 
number assigned to the laboratory by the accreditation body, and the 
expiration of accreditation.
    (b) For alternative chemical tests carried out under Sec. 280.15 of 
this part, each laboratory accredited under subparts C, D, or E of this 
part and currently listed in the Accredited Laboratory List shall 
provide to the fastener manufacturer, either directly or through the 
metal manufacturer, a written inspection and testing report containing 
all required information. All reports must be in English or be 
translated into English, must be signed by an approved signatory, must 
be protected by a tamper resistant system, and contain the following 
information:
    (1) Name and address of the laboratory;
    (2) Unique identification of the test report including date of 
issue and serial number or other appropriate means.
    (3) Name and address of client;
    (4) Coil or heat number of metal being tested;
    (5) Test results:
    (i) Actual tests required by the standards and specifications;
    (ii) Test results for each sample;
    (iii) All deviations from the test method;
    (iv) All other items required on test reports according to the test 
method;
    (v) Where the report contains results of tests performed by sub-
contractors, these results shall be clearly identified along with the 
name of the laboratory and accreditation information listed in 
paragraph (b)(9) of this section.
    (vi) A statement that the samples tested either conform or do not 
conform to the metal standards and specifications and identification of 
any nonconformance;
    (6) A statement that the report must not be reproduced except in 
full;
    (7) A statement to the effect that the test report relates only to 
the item(s) tested;
    (8) Name, title and signature of approved signatory accepting 
technical responsibility for the tests and test report;
    (9) The name of the body which accredited the laboratory for the 
specific tests performed which are the subject of the report, and code 
number assigned to the laboratory by the accreditation body, and the 
expiration of accreditation.
    (c) The laboratory shall issue corrections or additions to a test 
report only by a further document suitably marked, e.g. ``Supplement to 
test report serial number * * *'' This document must specify which test 
result is in question, the content of the result, the explanation of 
the result, and the reason for acceptance of the result.


Sec. 280.7  Recordkeeping requirements.

    (a) Each laboratory accredited under subparts C, D, or E of this 
part shall retain for 5 years after the performance of a test all 
records pertaining to that test concerning the inspection and testing, 
and certification, of fasteners under the Act and these regulations. 
The final test report or the test records maintained by the laboratory 
shall contain sufficient information to permit the test to be repeated 
at a later time if a retest is necessary. The laboratory shall maintain 
the test report and a record of all original observations, 
calculations, and derived data. The records shall include the identity 
of personnel involved in sample preparation and testing. Procedures for 
storage and retrieval of records must be documented and maintained in 
the laboratory's quality manual.
    (b) Manufacturers, importers, private label distributors, and 
persons who significantly alter fasteners shall retain for 5 years 
after the performance of a test all records pertaining to that test 
concerning the inspection and testing, and certification, of fasteners 
under the Act and these regulations.
    (c) Original records required. Persons required to keep records 
under this part must maintain the original records in the form in which 
that person receives or creates them unless that person meets all of 
the conditions of paragraph (d) of this section relating to 
reproduction of records. Original laboratory test reports described in 
Secs. 280.5, 280.6, 280.13 and 280.15(b) of this part must be kept.
    (d) Reproduction of original records. A person required to keep 
records under this part may maintain reproductions of documents other 
than laboratory test reports instead of the original records using any 
photographic, photostatic, miniature photographic, micrographic, 
automated archival storage, or other process that completely, 
accurately, legibly and durably reproduces the original records 
(whether on paper, microfilm, or through electronic digital storage 
techniques). The process must meet all of the requirements of 
paragraphs (d)(1) through (d)(9) of this section.
    (1) The system must be capable of reproducing all records on paper.
    (2) The system must record and be able to reproduce all marks, 
information, and other characteristics of the original record, 
including both obverse and reverse sides of paper documents in legible 
form.
    (3) When displayed on a viewer, monitor, or reproduced on paper, 
the records must exhibit a high degree of legibility and readability. 
(For purposes of this section, legible and legibility mean the quality 
of a letter or numeral that enable the observer to identify it 
positively and quickly to the exclusion of all other letters or 
numerals. Readable and readability mean the quality of a group of 
letters or numerals being recognized as complete words or numbers.)
    (4) The system must preserve the initial image (including both 
obverse

[[Page 50562]]

and reverse sides of paper documents) and record all changes, who made 
them and when they were made. This information must be stored in such a 
manner that none of it may be altered once it is initially recorded.
    (5) The regulated person must establish written procedures to 
identify the individuals who are responsible for the operation, use and 
maintenance of the system.
    (6) The regulated person must establish written procedures for 
inspection and quality assurance of records in the system and document 
the implementation of those procedures.
    (7) The system must be complete and contain all records required to 
be kept by this part or the regulated person must provide a method for 
correlating, identifying and locating records relating to the same 
transaction(s) that are kept in other record keeping systems.
    (8) The regulated person must keep a record of where, when, by 
whom, and on what equipment the records and other information were 
entered into the system.
    (9) Upon request by the Bureau of Export Administration or NIST, 
the regulated person must furnish, at the examination site, the 
records, the equipment and, if necessary, knowledgeable personnel for 
locating, reading, and reproducing any record in the system.
    (e) Destruction or disposal of records. If the Bureau of Export 
Administration, NIST or any other government agency makes a formal or 
informal request for any record or records, such record or records may 
not be destroyed or disposed of without the written authorization of 
the agency concerned. This prohibition applies even if such records 
have been retained for a period of time exceeding that required by 
paragraphs (a) or (b) of this section.
    (f) All persons required to keep records by this part must furnish 
those records when requested to do so by an employee of the Bureau of 
Export Administration or NIST.


Sec. 280.8  Ownership of laboratories by manufacturers.

    (a) If the Director finds that, as to a specific type of fastener, 
and as to a specific type of inspection or testing, a ban on 
manufacturer ownership or affiliation with a laboratory performing 
tests under the Act and these regulations would increase the protection 
of health and safety of the public or industrial workers, the Director 
may impose such a ban.
    (b) Before imposing a ban under paragraph (a) of this section, the 
Director shall provide advance notice and the opportunity for public 
comment.


Sec. 280.9  Subcontracting of testing.

    (a) Whenever a laboratory accredited under subparts C, D, or E of 
this part issues a test report under the Act and this part, it is 
implied that the report reflects work performed, and results obtained, 
by the personnel, equipment, and procedures of that laboratory. 
However, in some cases a laboratory may require the use of another 
facility due to equipment failure, need for specialized equipment, work 
overload, or to perform tests outside the laboratory's own scope of 
accreditation.
    (b) Whenever a laboratory accredited under subparts C, D, or E of 
this part subcontracts to another laboratory for the performance of any 
test or portion of a test it must:
    (1) Place the work with another laboratory accredited under either 
subpart C, D, or E of this part;
    (2) Inform the client, before the fact, that subcontracting will be 
necessary; and
    (3) Clearly identify in its records, and in the report to the 
client, specifically which test method(s) or portions of a test 
method(s) were performed by the accredited laboratory and which were 
performed by the subcontractor.


Sec. 280.10  Sampling.

    In the event that the standard or specification to which a 
manufacturer represents the fasteners in a particular sample to have 
been manufactured does not provide for the size, selection or integrity 
of the sample to be inspected and tested, the sample shall be 
determined in accordance with ASME/ANSI B18.18.2M, Inspection and 
Quality Assurance For High-Volume Machine Assembly Fasteners; ASME/ANSI 
B18.18.3M, Inspection and Quality Assurance for Special Purpose 
Fasteners; or ASME/ANSI B18.18.4M, Inspection and Quality Assurance for 
Highly Specialized Engineering Applications--Fasteners, as appropriate.


Sec. 280.11  Significant alterations of fasteners.

    (a) Any alteror who significantly alters a fastener so that it no 
longer conforms to the description in the relevant test report issued 
under section 5(c) of the Act or this part, and who thereafter offers 
for sale or sells such significantly altered fastener, shall:
    (1) Assign a new lot number;
    (2) Apply his or her registered insignia to the significantly 
altered fastener if the standards and specifications to which the 
fastener was originally manufactured required the fastener to bear a 
raised or depressed insignia identifying its manufacturer or private 
label distributor; and
    (3) Be treated as a manufacturer for the purposes of the Act and 
this part, and shall cause the fastener to be inspected and tested as 
required by section 5 of the Act and by this part unless the 
significantly altered fastener is delivered to a purchaser accompanied 
by a written statement noting the original lot number and the new lot 
number assigned by the alteror, disclosing the subsequent alteration, 
and warning that such alteration may affect the dimensional or physical 
characteristics of the fastener.
    (b) If the significant alteration is only electroplating of 
fasteners having a specified Rockwell C hardness of 32 or above, the 
requirements set forth in paragraphs (a)(2) and (a)(3) of this section 
shall not apply, but the alteror shall assign a new lot number as set 
forth in paragraph (a)(1) of this section and shall test the 
electroplated fasteners as required by the plating standards and 
specifications.
    (c) Any person who knowingly sells a significantly altered fastener 
as described in paragraph (a) of this section, and who did not alter 
such fastener, shall provide to the purchaser a copy of the statement 
required by paragraph (a)(3) of this section; unless the significant 
alteration is only electroplating of the fastener, as described in 
paragraph (b) of this section.
    (d) If the alteration is not a significant alteration, the 
requirements set forth in paragraph (a) of this section shall not 
apply, and the only testing requirements which apply are those required 
by the standards and specifications to which the alteration is 
performed. If the alteration involves cutting of threaded studs, rods, 
or bars into studs, these cut fasteners must be marked with the grade 
or property class identification marking appearing on the original 
threaded studs, rods, and bars.


Sec. 280.12   Applicability.

    (a) The requirements of the Fastener Quality Act and this part 
shall be applicable only to fasteners manufactured on or after May 27, 
1997.
    (b) Metal manufactured prior to May 27, 1997 may not be used to 
manufacture fasteners subject to the Act and this part, unless the 
metal has been tested for chemistry pursuant to Sec. 280.15 of this 
part by a laboratory accredited under the Act and this part and the 
chemical characteristics of the metal conform to those required by the 
standards and specifications.

[[Page 50563]]

    (c) Nothing in the Act and this part prohibits selling finished 
fasteners manufactured prior to May 27, 1997 or representing that such 
fasteners meet standards and specifications of a consensus standards 
organization or a government agency. Fasteners manufactured prior to 
May 27, 1997 may not be represented as being in conformance with the 
Act or this part.


Sec. 280.13   Imports of fasteners.

    (a) Except as provided in paragraph (b) of this section, it shall 
be unlawful for any person to sell to an importer, and for any importer 
to purchase any shipment of fasteners or fastener sets manufactured 
outside the United States unless such shipment to an importer is 
accompanied by a manufacturer's certificate of conformance, an original 
laboratory testing report with respect to each lot from which the 
fasteners are taken, and any other relevant lot identification 
information.
    (b) The requirement that delivery of fasteners to any importer must 
be accompanied by an original laboratory testing report shall not 
apply:
    (1) In the case of fasteners imported into the United States as 
products manufactured within a nation which is party to a 
congressionally approved free trade agreement with the United States 
that is in effect, provided that the Director has published in the 
Federal Register a certification that satisfactory arrangements have 
been reached by which purchasers within the United States can readily 
gain access to an original laboratory test report for such fasteners; 
or,
    (2) In the case of fasteners imported into the United States as 
Canadian-origin products under the United States-Canada Automobile Pact 
for use as original equipment in the manufacture of motor vehicles.


Sec. 280.14   Option for importers and private label distributors.

    (a) Notwithstanding the provisions of Sec. 280.13 of this part, 
delivery of a lot, or portion of a lot, of fasteners may be made by a 
manufacturer to an importer or private label distributor without the 
required original copy of the laboratory testing report if--
    (1) The manufacturer provides to the importer or private label 
distributor a certificate which, as a minimum, includes fastener 
description information contained in Sec. 280.6(a)(4), and a statement 
by the manufacturer certifying that the fasteners have been 
manufactured according to the requirements of the applicable standard 
or specification, but have not been tested by a laboratory accredited 
in accordance with section 6 of the Act; and
    (2) The importer or private label distributor assumes 
responsibility in writing for the inspection and testing of such lot or 
portion by a laboratory accredited in accordance with the procedures 
set out in this Part.
    (b) If the importer or private label distributor assumes the 
responsibility in writing for the inspection and testing of such lot or 
portion, the provisions of section 5(a), (b) and (c) of the Act shall 
apply to the importer or private label distributor in the same manner 
and to the same extent as to a manufacturer; except that the importer 
or private label distributor shall provide to the testing laboratory 
the certificate described under paragraph (a)(1) of this section.


Sec. 280.15   Alternative procedure for chemical characteristics.

    Notwithstanding any other provision of this regulation, a 
manufacturer shall be deemed to have demonstrated that the chemical 
characteristics of a lot conform to the standards and specifications to 
which the manufacturer represents such lot has been manufactured if the 
following requirements are met:
    (a) The coil or heat number of metal from which such lot was 
fabricated has been inspected and tested with respect to its chemical 
characteristics by a laboratory accredited in accordance with the Act 
and these regulations;
    (b) Such laboratory has provided to the manufacturer, either 
directly or through the metal manufacturer, a written inspection and 
testing report, prepared in accordance with Sec. 280.6 of this part, 
listing the chemical characteristics of such coil or heat number;
    (c) The report described in paragraph (b) of this section indicates 
that the chemical characteristics of such coil or heat number conform 
to those required by the standards and specifications to which the 
manufacturer represents such lot has been manufactured; and,
    (d) The manufacturer demonstrates that such lot has been fabricated 
from the coil or heat number of metal to which the report described in 
paragraphs (b) and (c) of this section relates.


Sec. 280.16   Subsequent purchaser.

    (a) If a purchaser of fasteners requests the seller to mark the 
container of fasteners with the lot number from which such fasteners 
were taken, either prior to the sale or at the time of sale, the seller 
shall conspicuously mark the container of fasteners with the lot 
number.
    (b) The seller shall provide copies of any applicable laboratory 
testing report or certification of conformance upon request to the 
subsequent purchaser of fasteners taken from the lot to which such 
testing report or manufacturer's certificate of conformance relates.

Subpart B--Laboratory Accreditation


Sec. 280.100   Introduction.

    The Fastener Quality Act sets out three alternatives by which a 
laboratory may become accredited for testing under the Act. This 
regulation sets out implementing procedures for each of those 
alternatives:
    (a) Subpart C of this part contains procedures by which the 
National Institute of Standards and Technology's National Voluntary 
Laboratory Accreditation Program will accredit laboratories for the 
testing of fasteners under the Act;
    (b) Subpart D of this part sets out procedures under which private 
entities may apply to NIST for approval to engage directly in the 
accreditation of laboratories for the testing of fasteners under the 
Act; and
    (c) Subpart E of this part sets out conditions under which the 
accreditation of foreign laboratories by their governments or 
organizations recognized by the Director shall be deemed to satisfy the 
laboratory accreditation requirements for the testing of fasteners 
under the Act.


Sec. 280.101   Accredited laboratory list.

    NIST shall prepare and maintain an Accredited Laboratory List of 
laboratories accredited under subparts C, D, and E of this part. Only 
laboratory test reports covering tests performed by a laboratory listed 
in the Accredited Laboratory List at the time the report was issued, 
and which are within the scope of the laboratory's accreditation, shall 
be deemed to meet the requirements of the Act.


Sec. 280.102   Procedures for inclusion in the accredited laboratory 
list.

    (a) NVLAP, and all entities approved by NIST under subpart D of 
this part or recognized by NIST under subpart E of this part shall 
promptly notify NIST of each accreditation action taken under subparts 
C, D, or E of this part, respectively. Accreditation actions include 
initial accreditation, denials of accreditation, renewals, suspensions, 
terminations, revocations and changes in scope. Notifications shall be 
filed with: Fastener Quality Act Program Manager, Office of Standards 
Services, National Institute of Standards and Technology, Gaithersburg, 
Maryland 20899.

[[Page 50564]]

    (b) Each notification to NIST shall include the following 
information, in English: The name of the laboratory accreditation body 
which granted the accreditation; the name and address of the laboratory 
affected by the accreditation action; the nature of the accreditation 
action; a copy of the laboratory's accreditation certificate and a 
scope of accreditation which states the fastener test methods for which 
it has been accredited; the name and telephone number of the authorized 
representative(s) and approved signatory(s) of the fastener testing 
laboratory; information concerning the physical locations of all 
organizational units involved in accredited fastener testing, and the 
specific scope of fastener testing for each organizational unit for 
which accreditation has been granted.
    (c) NIST shall revise as appropriate the Accredited Laboratory List 
when notified of accreditation actions and shall take appropriate steps 
to make information changes promptly available to the public.


Sec. 280.103   Removal from the accredited laboratory list.

    (a) NIST may remove from the Accredited Laboratory List any 
fastener testing laboratory accredited under subpart C, D or E of this 
part if NIST deems such action to be in the public interest. Laboratory 
test reports describing tests performed by a laboratory after it has 
been removed from the Accredited Laboratory List under this section 
shall not be deemed to meet the requirements of the Act.
    (b) A laboratory may appeal the removal or proposed removal from 
the Accredited Laboratory List to the Director by submitting a 
statement of reasons why the laboratory should remain on the list. NIST 
may, at its discretion, hold in abeyance a removal action pending a 
final decision by the Director. The Director shall inform the 
laboratory in writing of the decision within sixty days following 
receipt of the appeal.

Subpart C--NIST Fastener Laboratory Accreditation Procedures


Sec. 280.200   Introduction.

    This subpart sets out the procedures and technical requirements of 
the NVLAP Fasteners Testing Program (``the Program'') for the 
accreditation of laboratories that test fasteners. Laboratories which 
are granted accreditation under this program for certain tests will be 
eligible to provide testing services and test reports required by the 
Fastener Quality Act for those tests. Accreditation may be granted to 
any laboratory (including: Commercial; manufacturers'; university; and 
laboratories located in foreign countries) that demonstrates competence 
to provide services according to the criteria specified in this 
subpart. It is up to the laboratory to select the areas and specific 
tests within each area for its proposed scope of accreditation. A 
laboratory may be accredited to test and/or measure fasteners in any 
one or more of the areas of chemical, dimensional, nondestructive, 
mechanical and physical, or metallography testing. Laboratories located 
outside of the U.S. must meet certain additional requirements 
including: Additional fees for travel outside the U.S. and provision of 
a language translator.


Sec. 280.201   Applicability of part 285, title 15, Code of Federal 
Regulations.

    As permitted by section 6 of the Act, and for the purposes of that 
Act only, the provisions of part 285, title 15 of the Code of Federal 
Regulations are superseded by the procedures and requirements set forth 
in this Subpart. The provisions of part 285, title 15 of the Code of 
Federal Regulations remain in effect except as they pertain to 
laboratory accreditation actions required by the Act.


Sec. 280.202   Establishment of the Program.

    (a) NVLAP shall develop the technical requirements for the Program 
based on expert advice.
    (b) As a means of assuring effective and meaningful cooperation, 
input, and participation by those federal agencies that may have an 
interest in and may be affected by the Program, NVLAP may communicate 
and consult with appropriate officials within those agencies.
    (c) When NVLAP has completed the development of the technical 
requirements of the Program and established a schedule of fees for 
accreditation, NVLAP shall publish a notice in the Federal Register 
announcing the establishment of the Program.
    (d) The notice will:
    (1) Identify the scope of the Program;
    (2) Advise how to apply for accreditation.
    (e) NVLAP shall establish fees in amounts that will enable the 
Program to be self-sufficient. NVLAP shall revise the fees when 
necessary to maintain self-sufficiency.


Sec. 280.203  Adding to or modifying the program.

    (a) The Program may be added to, modified, or realigned based on 
either a written request from any person wishing to add or delete 
specific standards, test methods, or types of test methods or a need 
identified by NVLAP.
    (b) NVLAP may choose to make the additions or modifications 
available for accreditation when:
    (1) The additional standards, test methods, or types of test 
methods requested are directly relevant to the Program;
    (2) It is feasible and practical to accredit testing laboratories 
for the additional standards, test methods, or types of test methods; 
and
    (3) It is likely that laboratories will seek accreditation for the 
additional standards, test methods, or types of test methods.


Sec. 280.204  NVLAP Program Handbook.

    All specific laboratory accreditation requirements and NVLAP 
interpretations shall be documented in a program handbook which NVLAP 
shall develop and maintain. The handbook shall be made available to all 
participating laboratories. NVLAP may prepare a NVLAP Program Handbook 
for the Fastener Testing Program for use by applicant and accredited 
laboratories. The purpose of the handbook is to provide specific 
technical details for fastener testing as they apply to on-site 
assessment, proficiency testing, test equipment and facilities, and 
scope of accreditation.


Sec. 280.205  Applying for accreditation.

    (a) A laboratory may request an application for accreditation in 
the Program in accordance with instructions provided in notices 
announcing the Program's formal establishment.
    (b) Upon receipt of a laboratory's application, NVLAP shall:
    (1) Acknowledge receipt of the application;
    (2) Request further information, if necessary;
    (3) Confirm payment of fees before proceeding with the 
accreditation process; and
    (4) Specify the next step(s) in the accreditation process.
    (c) All laboratory accreditation documents must be in English or 
the laboratory seeking accreditation must supply an English translation 
of all documents at the time it files its application.
    (d) Accreditation of laboratories outside the United States may 
require payment of additional traveling expenses for on-site 
assessments and proficiency testing.

[[Page 50565]]

Sec. 280.206  Assessing and evaluating a laboratory.

    (a) Information used to evaluate a laboratory's compliance with the 
conditions for accreditation set out in Sec. 280.214, the criteria for 
accreditation set out in Sec. 280.215, and the technical requirements 
established will include:
    (1) Application and other material submitted by the laboratory 
(Sec. 280.214(b)).
    (2) On-site assessment reports;
    (3) Laboratory performance on proficiency tests;
    (4) Laboratory responses to identified deficiencies; and
    (5) Technical evaluation.
    (b) NVLAP shall arrange the assessment and evaluation of applicant 
laboratories in such a way as to minimize potential conflicts of 
interest.
    (c) NVLAP shall inform each applicant laboratory of any action(s) 
that the laboratory must take to qualify for accreditation.


Sec. 280.207  Granting and renewing accreditation.

    (a) NVLAP will take action to grant initial accreditation, or 
renew, suspend, or propose to deny or revoke accreditation of an 
applicant laboratory, based on the degree to which the laboratory 
complies with the specific NVLAP requirements. Accreditation shall be 
granted for a one year period. Before initial accreditation and every 2 
years thereafter, an on-site assessment of each laboratory shall be 
conducted to determine compliance with the NVLAP criteria.
    (b) If accreditation is granted or renewed, NVLAP shall:
    (1) Provide a Certificate of Accreditation and a Scope of 
Accreditation to the laboratory;
    (2) Provide guidance on referencing the laboratory's accredited 
status, and the use of the NVLAP logo by the laboratory and its 
clients, as needed; and
    (3) Remind the laboratory that accreditation does not relieve it 
from complying with applicable federal, state, and local laws and 
regulations.
    (c) NVLAP shall notify an accredited laboratory at least 30 days 
before its accreditation expires advising of the action(s) the 
laboratory must take to renew its accreditation.


Sec. 280.208  Denying, suspending, and revoking accreditation.

    (a) If NVLAP proposes to deny or revoke accreditation of a 
laboratory, NVLAP shall inform the laboratory of the reasons for the 
proposed denial or revocation and the procedure for appealing such a 
decision.
    (b) The laboratory will have 30 days from the date of receipt of 
the proposed denial or revocation letter to appeal the decision to the 
Director of NIST. If the laboratory appeals the decision to the 
Director of NIST, the proposed denial or revocation will be stayed 
pending the outcome of the appeal. The proposed denial or revocation 
will become final through the issuance of a written decision to the 
laboratory in the event that the laboratory does not appeal the 
proposed denial or revocation within that 30-day period.
    (c) If NVLAP finds that an accredited laboratory has violated the 
terms of its accreditation or the provisions of these procedures, NVLAP 
may, after consultation with the laboratory, suspend the laboratory's 
accreditation, or advise of NVLAP's intent to revoke accreditation. If 
accreditation is suspended, NVLAP shall notify the laboratory of that 
action stating the reasons for and conditions of the suspension and 
specifying the action(s) the laboratory must take to have its 
accreditation reinstated.
    (d) A laboratory whose accreditation has been denied, revoked, 
terminated, or expired, or which has withdrawn its application before 
being accredited, may reapply and be accredited if the laboratory:
    (1) Completes the assessment and evaluation process; and
    (2) Meets the conditions and criteria for accreditation that are 
set out in sections 280.214 and 280.215.
    (e) Conditions of suspension will include prohibiting the 
laboratory from using the NVLAP logo on its test reports during the 
suspension period. The determination of NVLAP whether to suspend or to 
propose revocation of a laboratory's accreditation will depend on the 
nature of the violation(s) of the terms of its accreditation.


Sec. 280.209  Voluntary termination of accreditation.

    A laboratory may at any time terminate its participation and 
responsibilities as an accredited laboratory by advising NVLAP in 
writing of its desire to do so. NVLAP shall terminate the laboratory's 
accreditation and shall notify the laboratory stating that its 
accreditation has been terminated in response to its request.


Sec. 280.210  Change in status of laboratory.

    Accreditation of a laboratory is based on specific conditions and 
criteria including the laboratory ownership, location, staffing, 
facilities, and configuration. Changes in any of these conditions or 
criteria could result in loss of accreditation. NVLAP must be informed 
if any of the conditions or criteria for accreditation are changed so 
that a determination can be made concerning the status of the 
accreditation.


Sec. 280.211  Authorized representative.

    The laboratory shall designate an Authorized Representative to sign 
the NVLAP application form and commit the laboratory to fulfill the 
NVLAP requirements. Only the Authorized Representative can authorize a 
change in the scope or nature of the laboratory's application. This 
person will receive all correspondence and inquiries from NVLAP. The 
Authorized Representative may also be an Approved Signatory. The 
laboratory must provide to NVLAP the name and address of the Authorized 
Representative and must, within 30 days, notify NVLAP of a change of 
Authorized Representative.


Sec. 280.212  Approved signatory.

    (a) The laboratory shall designate one or more staff members as 
Approved Signatories. Approved Signatories shall be persons with 
appropriate responsibility, authority and technical capability within 
the organization. The laboratory must maintain a list of Approved 
Signatories and make that list available for review during on-site 
assessments. The laboratory must provide to NVLAP the name(s) and 
address(es) of the Approved Signatory(s) and must, within 30 days, 
notify NVLAP of a change of Approved Signatory(s).
    (b) The authorized signature of at least one Approved Signatory 
must appear on each test reports that is written in compliance with the 
Act and endorsed with the NVLAP logo. The approved signatory is 
responsible for the technical content of the report and is the person 
to be contacted by NVLAP, laboratory clients, or others in case of 
questions or problems with the report.


Sec. 280.213  Application of accreditation conditions and criteria.

    To become accredited and maintain accreditation, a laboratory must 
meet the conditions for accreditation set out in Sec. 280.214, the 
criteria set out in Sec. 280.215, and the guidance provided in the 
Program Handbook.


Sec. 280.214  Conditions for accreditation.

    (a) To become accredited and maintain accreditation, a laboratory 
shall agree in writing to:
    (1) Be assessed and evaluated initially and on a periodic basis;
    (2) Demonstrate, on request that it is able to perform the tests 
representative

[[Page 50566]]

of those for which it is seeking accreditation;
    (3) Pay all fees;
    (4) Participate in proficiency testing as required.
    (5) Be capable of performing the tests for which it is accredited 
according to the latest version of the test method within one year 
after its publication or within another time limit specified by NVLAP;
    (6) Limit the representation of the scope of its accreditation to 
only those tests or services for which accreditation is granted;
    (7) Resolve all deficiencies;
    (8) Limit all its work or services for clients to those areas where 
competence and capacity are available;
    (9) Inform its clients that the laboratory's accreditation or any 
of its test reports in no way constitutes or implies product 
certification, approval, or endorsement by NIST;
    (10) Maintain records of all actions taken in response to testing 
complaints for 5 years, as required by Sec. 280.7 of this part;
    (11) Maintain an independent decisional relationship between itself 
and its clients, affiliates, or other organizations so that the 
laboratory's capacity to render test reports objectively and without 
bias is not adversely affected;
    (12) Report to NVLAP within 30 days any major changes involving the 
location, ownership, management structure, authorized representative, 
approved signatories, or facilities of the laboratory; and
    (13) Return to NVLAP the Certificate of Accreditation and the Scope 
of Accreditation for revision or other action should it:
    (i) Be requested to do so by NVLAP;
    (ii) Voluntarily terminate its accredited status; or
    (iii) Become unable to conform to any of these conditions, the 
applicable criteria of this Subpart or Sec. 280.215, and related 
technical requirements.
    (b) To become accredited and maintain accreditation, a laboratory 
shall supply, upon request, the following information:
    (1) Legal name and full address;
    (2) Ownership of the laboratory;
    (3) Organization chart defining relationships that are relevant to 
performing testing covered in the accreditation request;
    (4) General description of the laboratory, including its facilities 
and scope of operation;
    (5) Name, address, and telephone and FAX number of the authorized 
representative of the laboratory;
    (6) Names or titles and qualifications of laboratory staff 
nominated to serve as approved signatories of test reports that 
reference NVLAP accreditation;
    (7) The laboratory quality manual; and
    (8) Other information as NVLAP may require.


Sec. 280.215  Criteria for accreditation.

    (a) Scope. (1) This section sets out the general requirements in 
accordance with which a laboratory has to demonstrate that it operates, 
if it is to be recognized as competent to carry out specific tests.
    (2) Additional requirements and information which have to be 
disclosed for assessing competence or for determining compliance with 
other criteria may be specified by NVLAP, depending upon the specific 
character of the task of the laboratory.
    (3) This section is for use by testing laboratories in the 
development and implementation of their quality systems. It will also 
be used by NVLAP in the determination of the competence of 
laboratories.
    (b) Organization and management. (1) The laboratory shall be 
legally identifiable. It shall be organized and shall operate in such a 
way that its permanent, temporary and mobile facilities meet the 
requirements of this Subpart.
    (2) The laboratory shall:
    (i) Have managerial staff with the authority and resources needed 
to discharge their duties;
    (ii) Have policies to ensure that its personnel are free from any 
commercial, financial and other pressures which might adversely affect 
the quality of their work;
    (iii) Be organized in such a way that confidence in its 
independence of judgement and integrity is maintained at all times;
    (iv) Specify and document the responsibility, authority and 
interrelation of all personnel who manage, perform or verify work 
affecting the quality of calibrations and tests;
    (v) Provide supervision by persons familiar with the calibration or 
test methods and procedures, the objective of the calibration or test 
and the assessment of the results. The ratio of supervisory to non-
supervisory personnel shall be such as to ensure adequate supervision;
    (vi) Have a technical manager (however named) who has overall 
responsibility for the technical operations;
    (vii) Have a quality manager (however named) who has responsibility 
for the quality system and its implementation. The quality manager 
shall have direct access to the highest level of management at which 
decisions are taken on laboratory policy or resources, and to the 
technical manager. In some laboratories, the quality manager may also 
be the technical manager or deputy technical manager;
    (viii) Nominate deputies in case of absence of the technical or 
quality manager;
    (ix) Have documented policy and procedures to ensure the protection 
of clients' confidential information and proprietary rights;
    (x) Where appropriate, participate in interlaboratory comparisons 
and proficiency testing programs.
    (c) Quality system, audit and review. (1) The laboratory shall 
establish and maintain a quality system appropriate to the type, range 
and volume of calibration and testing activities it undertakes. The 
elements of this system shall be documented. The quality documentation 
shall be available for use by the laboratory personnel. The laboratory 
shall define and document its policies and objectives for, and its 
commitment to, good laboratory practice and quality of calibration or 
testing services. The laboratory management shall ensure that these 
policies and objectives are documented in a quality manual and 
communicated to, understood, and implemented by all laboratory 
personnel concerned. The quality manual shall be maintained current 
under the responsibility of the quality manager.
    (2) The quality manual, and related quality documentation, shall 
state the laboratory's policies and operational procedures established 
in order to meet the requirements of this subpart. The quality manual 
and related quality documentation shall also contain:
    (i) A quality policy statement, including objectives and 
commitments, by top management;
    (ii) The organization and management structure of the laboratory, 
its place in any parent organization and relevant organizational 
charts;
    (iii) The relations between management, technical operations, 
support services and the quality system;
    (iv) Procedures for control and maintenance of documentation;
    (v) Job descriptions of key staff and reference to the job 
descriptions of other staff;
    (vi) Identification of the laboratory's approved signatories;
    (vii) The laboratory's procedures for achieving traceability of 
measurements;
    (viii) The laboratory's scope of calibrations and/or tests;
    (ix) Arrangements for ensuring that the laboratory reviews all new 
work to

[[Page 50567]]

ensure that it has the appropriate facilities and resources before 
commencing such work;
    (x) Reference to the calibration, verification and/or test 
procedures used;
    (xi) Procedures for handling calibration and test items;
    (xii) Reference to the major equipment and reference measurement 
standards used;
    (xiii) Reference to procedures for calibration, verification and 
maintenance of equipment;
    (xiv) Reference to verification practices including interlaboratory 
comparisons, proficiency testing programs, use of reference materials 
and internal quality control schemes;
    (xv) Procedures to be followed for feedback and corrective action 
whenever testing discrepancies are detected, or departures from 
documented policies and procedures occur;
    (xvi) The laboratory management policies for departures from 
documented policies and procedures or from standard specifications;
    (xvii) Procedures for dealing with complaints;
    (xviii) Procedures for protecting confidentiality and proprietary 
rights;
    (xix) Procedures for audit and review.
    (xx) Policies and procedures directly related to compliance with 
this Subpart.
    (3) The laboratory shall arrange for audits of its activities at 
appropriate intervals to verify that its operations continue to comply 
with the requirements of the quality system. Such audits shall be 
carried out by trained and qualified staff who are, wherever possible, 
independent of the activity to be audited. Where the audit findings 
cast doubt on the correctness or validity of the laboratory's 
calibration or test results, the laboratory shall take immediate 
corrective action and shall immediately notify, in writing, any client 
whose work may have been affected.
    (4) The quality system adopted to satisfy the requirements of this 
Section shall be reviewed at least once each year by the management to 
ensure its continuing suitability and effectiveness and to introduce 
any necessary changes or improvements.
    (5) All audit and review findings and any corrective actions that 
arise from them shall be documented. The person responsible for quality 
shall ensure that these actions are discharged within the agreed 
timescale.
    (6) In addition to periodic audits the laboratory shall ensure the 
quality of results provided to clients by implementing checks. These 
checks shall be reviewed and shall include, as appropriate, but not be 
limited to:
    (i) Internal quality control schemes using whenever possible 
statistical techniques;
    (ii) Participation in proficiency testing or other interlaboratory 
comparisons;
    (iii) Regular use of certified reference materials and/or in-house 
quality control using secondary reference materials;
    (iv) Replicate testings using the same or different methods;
    (v) Re-testing of retained items;
    (vi) Correlation of results for different characteristics of an 
item.
    (d) Personnel. (1) The testing laboratory shall have sufficient 
personnel, having the necessary education, training, technical 
knowledge and experience for their assigned functions.
    (2) The testing laboratory shall ensure that the training of its 
personnel is kept up-to-date.
    (3) Records on the relevant qualifications, training, skills and 
experience of the technical personnel shall be maintained by the 
laboratory.
    (e) Accommodation and environment. (1) Laboratory accommodation, 
calibration and test areas, energy sources, lighting, heating and 
ventilation shall be such as to facilitate proper performance of 
calibrations or tests.
    (2) The environment in which these activities are undertaken shall 
not invalidate the results or adversely affect the required accuracy of 
measurement. Particular care shall be taken when such activities are 
undertaken at sites other than the permanent laboratory premises.
    (3) The laboratory shall provide facilities for the effective 
monitoring, control and recording of environmental conditions as 
appropriate. Due attention shall be paid, for example, to biological 
sterility, dust, electromagnetic interference, humidity, voltage, 
temperature, and sound and vibration levels, as appropriate to the 
calibrations or tests concerned.
    (4) There shall be effective separation between neighboring areas 
when the activities therein are incompatible.
    (5) Access to and use of all areas affecting the quality of these 
activities shall be defined and controlled.
    (6) Adequate measures shall be taken to ensure good housekeeping in 
the laboratory.
    (f) Equipment and reference materials. (1) The laboratory shall be 
furnished with all items of equipment (including reference materials) 
required for the correct performance of calibrations and tests. In 
those cases where the laboratory needs to use equipment outside its 
permanent control it shall ensure that the relevant requirements of 
this Section are met.
    (2) All equipment shall be properly maintained. Maintenance 
procedures shall be documented. Any item of equipment which has been 
subjected to overloading or mishandling, or which gives suspect 
results, or has been shown by verification or otherwise to be 
defective, shall be taken out of service, clearly identified and 
wherever possible stored at a specified place until it has been 
repaired and shown by calibration, verification or test to perform 
satisfactorily. The laboratory shall examine the effect of this defect 
on previous calibrations or tests.
    (3) Each item of equipment including reference materials shall, 
when appropriate, be labeled, marked or otherwise identified to 
indicate its calibration status.
    (4) Records shall be maintained of each item of equipment and all 
reference materials significant to the calibrations or tests performed. 
The records shall include:
    (i) The name of the item of equipment;
    (ii) The manufacturer's name, type identification, and serial 
number or other unique identification;
    (iii) Date received and date placed in service;
    (iv) Current location, where appropriate;
    (v) Condition when received (e.g. new, used, reconditioned);
    (vi) Copy of the manufacturer's instructions, where available;
    (vii) Dates and results of calibrations and/or verifications and 
date of next calibration and/or verification;
    (viii) Details of maintenance carried out to date and planned for 
the future;
    (ix) History of any damage, malfunction, modification or repair.
    (g) Measurement traceability and calibration. (1) All measuring and 
testing equipment having an effect on the accuracy or validity of 
calibrations or tests shall be calibrated and/or verified before being 
put into service. The laboratory shall have an established program for 
the calibration and verification of its measuring and test equipment.
    (2) The overall program of calibration and/or verification and 
validation of equipment shall be designed and operated so as to ensure 
that, wherever applicable, measurements made by the laboratory are 
traceable to national standards of measurement where available. 
Calibration certificates shall wherever applicable indicate the 
traceability to national standards of measurement and shall provide the

[[Page 50568]]

measurement results and associated uncertainty of measurement and/or a 
statement of compliance with an identified metrological specification.
    (3) Where traceability to national standards of measurement is not 
applicable, the laboratory shall provide satisfactory evidence of 
correlation of results, for example by participation in a suitable 
program of interlaboratory comparisons or proficiency testing.
    (4) Reference standards of measurement held by the laboratory shall 
be used for calibration only and for no other purpose, unless it can be 
demonstrated that their performance as reference standards has not been 
invalidated.
    (5) Reference standards of measurement shall be calibrated by a 
body that can provide traceability to a national standard of 
measurement. There shall be a program of calibration and verification 
for reference standards.
    (6) Where relevant, reference standards and measuring and testing 
equipment shall be subjected to in-service checks between calibrations 
and verifications.
    (7) Reference materials shall, where possible, be traceable to 
national or international standards of measurement, or to national or 
international standard reference materials.
    (h) Calibration and test methods. (1) The laboratory shall have 
documented instructions on the use and operation of all relevant 
equipment, on the handling and preparation of items and for calibration 
and/or testing, where the absence of such instructions could jeopardize 
the calibrations or tests. All instructions, standards, manuals and 
reference data relevant to the work of the laboratory shall be 
maintained up-to-date and be readily available to the staff.
    (2) The laboratory shall use appropriate methods and procedures for 
all calibrations and tests and related activities within its 
responsibility (including sampling, handling, transport and storage, 
preparation of items, estimation of uncertainty of measurement and 
analysis of calibration and/or test data). They shall be consistent 
with the accuracy required, and with any standard specifications 
relevant to the calibrations or tests concerned.
    (3) Where methods are not specified, the laboratory shall, wherever 
possible, select methods that have been published in international or 
national standards, those published by reputable technical 
organizations or in relevant scientific texts or journals.
    (4) Where it is necessary to employ methods that have not been 
established as standard, these shall be subject to agreement with the 
client, be fully documented and validated, and be available to the 
client and other recipients of the relevant reports.
    (5) Where sampling is carried out as part of the test method, the 
laboratory shall use documented procedures and appropriate statistical 
techniques to select samples.
    (6) Calculations and data transfers shall be subject to appropriate 
checks.
    (7) Where computers or automated equipment are used for the 
capture, processing, manipulation, recording, reporting, storage or 
retrieval of calibration or test data, the laboratory shall ensure 
that:
    (i) The requirements of this subpart are complied with;
    (ii) Computer software is documented and adequate for use;
    (iii) Procedures are established and implemented for protecting the 
integrity of data; such procedures shall include, but not be limited 
to, integrity of data entry or capture, data storage, data transmission 
and data processing;
    (iv) Computer and automated equipment is maintained to ensure 
proper functioning and provided with the environmental and operating 
conditions necessary to maintain the integrity of calibration and test 
data;
    (v) It establishes and implements appropriate procedures for the 
maintenance of security of data including the prevention of 
unauthorized access to, and the unauthorized amendment of, computer 
records.
    (8) Documented procedures shall exist for the purchase, reception 
and storage of consumable materials used for the technical operations 
of the laboratory.
    (i) Handling of calibration and test items. (1) The laboratory 
shall have a documented system for uniquely identifying the items to be 
calibrated or tested, to ensure that there can be no confusion 
regarding the identity of such items at any time.
    (2) Upon receipt, the condition of the calibration or test item, 
including any abnormalities or departures from standard conditions as 
prescribed in the relevant calibration or test method, shall be 
recorded. Where there is any doubt as to the item's suitability for 
calibration or test, where the item does not conform to the description 
provided, or where the calibration or test required is not fully 
specified, the laboratory shall consult the client for further 
instruction before proceeding. The laboratory shall establish whether 
the item has received all necessary preparation, or whether the client 
requires preparation to be undertaken or arranged by the laboratory.
    (3) The laboratory shall have documented procedures and appropriate 
facilities to avoid deterioration or damage to the calibration or test 
item, during storage, handling, preparation, and calibration or test; 
any relevant instructions provided with the item shall be followed. 
Where items have to be stored or conditioned under specific 
environmental conditions, these conditions shall be maintained, 
monitored and recorded where necessary. Where a calibration or test 
item or portion of an item is to be held secure (for example, for 
reasons of record, safety or value, or to enable check calibrations or 
tests to be performed later), the laboratory shall have storage and 
security arrangements that protect the condition and integrity of the 
secured items or portions concerned.
    (4) The laboratory shall have documented procedures for the 
receipt, retention or safe disposal of calibration or test items, 
including all provisions necessary to protect the integrity of the 
laboratory.
    (j) Records. (1) The laboratory shall maintain a record system to 
suit its particular circumstances and comply with any applicable 
regulations. It shall retain on record all original observations, 
calculations and derived data, calibration records and a copy of the 
calibration certificate, test certificate or test report for an 
appropriate period as required in Sec. 280.7. The records for each 
calibration and test shall contain sufficient information to permit 
their repetition. The records shall include the identity of personnel 
involved in sampling, preparation, calibration or testing.
    (2) All records (including those listed in Sec. 280.215(f)(4) 
pertaining to calibration and test equipment), certificates and reports 
shall be safely stored, held secure and in confidence to the client.
    (k) Certificates and reports. (1) The results of each calibration, 
test, or series of calibrations or tests carried out by the laboratory 
shall be reported accurately, clearly, unambiguously and objectively, 
in accordance with any instructions in the calibration or test methods. 
The results should normally be reported in a calibration certificate, 
test report or test certificate and should include all the information 
necessary for the interpretation of the calibration or test results and 
all information required by the method used.
    (2) Where the certificate or report contains results of 
calibrations or tests

[[Page 50569]]

performed by sub-contractors, these results shall be clearly 
identified.
    (3) Particular care and attention shall be paid to the arrangement 
of the certificate or report, especially with regard to presentation of 
the calibration or test data and ease of assimilation by the reader. 
The format shall be carefully and specifically designed for each type 
of calibration or test carried out, but the headings shall be 
standardized as far as possible.
    (4) Material amendments to a calibration certificate, test report 
or test certificate after issue shall be made only in the form of a 
further document, or data transfer including the statement ``Supplement 
to Calibration Certificate for Test Report or Test Certificate, serial 
number * * * or as otherwise identified'', or equivalent form of 
wording. Such amendments shall meet all the relevant requirements of 
Sec. 280.215(j).
    (5) The laboratory shall notify clients promptly, in writing, of 
any event such as the identification of defective measuring or test 
equipment that casts doubt on the validity of results given in any 
calibration certificate, test report or test certificate or amendment 
to a report or certificate.
    (6) The laboratory shall ensure that, where clients require 
transmission of calibration or test results by telephone, telex, 
facsimile or other electronic or electromagnetic means, staff will 
follow documented procedures that ensure that the requirements of this 
Subpart are met and that confidentiality is preserved.
    (l) Subcontracting of calibration or testing. (1) Where a 
laboratory sub-contracts any part of the calibration or testing, this 
work shall be placed with a laboratory accredited under either subparts 
C, D or E of this part for the specific tests being subcontracted. The 
laboratory shall comply with Sec. 280.9, and shall advise the client in 
writing of its intention to subcontract any portion of the testing to 
another party.
    (2) The laboratory shall record and retain details of its 
investigation of the accredited status and testing competence of 
subcontractors and maintain a register of all subcontracting.
    (m) Outside support services and supplies. (1) Where the laboratory 
procures outside services and supplies, other than those referred to 
this Subpart, in support of calibrations or tests, the laboratory shall 
use only those outside support services and supplies that are of 
adequate quality to sustain confidence in the laboratory's calibrations 
or tests.
    (2) Where no independent assurance of the quality of outside 
support services or supplies is available, the laboratory shall have 
procedures to ensure that purchased equipment, materials and services 
comply with specified requirements. The laboratory should, wherever 
possible, ensure that purchased equipment and consumable materials are 
not used until they have been inspected, calibrated or otherwise 
verified as complying with any standard specifications relevant to the 
calibrations or tests concerned.
    (3) The laboratory shall maintain records of all suppliers from 
whom it obtains support services or supplies required for calibrations 
or tests.
    (n) Complaints. (1) The laboratory shall have documented policy and 
procedures for the resolution of complaints received from clients or 
other parties about the laboratory's activities. A record shall be 
maintained of all complaints and of the actions taken by the 
laboratory.
    (2) Where a complaint, or any other circumstance, raises doubt 
concerning the laboratory's compliance with the laboratory's policies 
or procedures, or with the requirements of this section or otherwise 
concerning the quality of the laboratory's calibrations or tests, the 
laboratory shall ensure that those areas of activity and responsibility 
involved are promptly audited in accordance with this section.

Subpart D--NIST Approval of Private Accreditation Programs


Sec. 280.300  Introduction.

    In accordance with section 6(a)(1)(B) of the Act (15 U.S.C. 5405 
(a)(1)(B)), this subpart sets forth the procedures and conditions under 
which private entities may apply for approval by NIST to engage 
directly in the accreditation of laboratories for the testing of 
fasteners under the Act.


Sec. 280.301  Application.

    (a) Application must be made to NIST for approval to accredit 
laboratories for fastener testing under the Act. Upon request, NIST 
will provide application forms and instructions. The applicant shall 
complete the application in English and may provide whatever additional 
enclosures, attachments or exhibits the applicant deems appropriate.
    (b) Application packages may be obtained from: Manager, FQA 
Accreditation Body Evaluation Program, NIST, Bldg. 820, Room 282, 
Gaithersburg, Maryland, 20899. Requests may be made by mail or by FAX 
to: (301) 963-2871.
    (c) The applicant shall reimburse NIST for all costs incurred in 
the evaluation of its accreditation program and subsequent costs 
incurred in ensuring the continued compliance of its program. 
Reimbursement shall be in accordance with the fee schedule established 
by NIST for this purpose.
    (d) An application may be revised by an applicant at any time prior 
to the final decision by NIST. An application may be withdrawn by an 
applicant, without prejudice, at any time prior to the final decision 
by the Director.


Sec. 280.302  Review and decision process.

    (a) Applications submitted by private laboratory accreditation 
bodies will be accepted by NIST and their receipt acknowledged in 
writing. The applications will be reviewed by NIST against the criteria 
specified in this subpart and in subpart F of this part. NIST may 
request additional information as needed from the applicant.
    (b) NIST shall conduct on-site assessments of the facilities of the 
applicant including all of the applicant's organizational units and 
locations covered by the application.
    (c) If the applicant's program is deemed by NIST to have met the 
requirements for approval, the applicant shall be notified by NIST in 
writing. The approval notice shall include the dates when the approval 
begins and the scope of the approval. The approval period shall be for 
as long as the laboratory accreditation body continues to satisfy the 
requirements of Sec. 280.303. As part of maintaining its approved 
status, each laboratory accreditation body shall agree to be reassessed 
by NIST every two years following its initial notice of approval. NIST 
will maintain and make available to the public a list of approved 
fastener accreditation programs.
    (d) If the applicant's program does not meet the requirements for 
approval, the applicant shall be notified in writing, listing the 
specific requirements from this subpart and subpart F of this part 
which the applicant's program has not met. After receipt of such a 
notification, and within the response period provided by NIST, the 
applicant may:
    (1) Submit additional information for further review. Reviewing the 
new submission may involve additional on-site visits by NIST personnel. 
Additional fees may be required. Or,
    (2) Submit a request that the original application be reconsidered, 
including a statement of reasons why the application should have been 
approved.


Sec. 280.303  Criteria for approval.

    An applicant for NIST approval must demonstrate the ability to 
operate an accreditation program consistent with the requirements of 
this subpart and subparts A, B and F of this part.

[[Page 50570]]

Sec. 280.304  Maintaining approved status.

    (a) Approved accreditation bodies shall continue to satisfy all the 
requirements of approval during the approval period.
    (b) Upon request by NIST, approved accreditation bodies shall make 
available to NIST and BXA all records and materials pertaining to the 
program.
    (c) NIST may elect to have its representative participate as an 
observer during on-site visits to testing laboratories seeking 
accreditation by an approved accreditation body.
    (d) Neither the accreditation body, nor any laboratory it accredits 
under the Act and these regulations shall take any action which states 
or implies the approval, or endorsement by NIST or any other agency of 
the U.S. government of the results of tests carried out by such 
laboratories. In addition, neither the accreditation body, nor any 
laboratory it accredits under the Act and these regulations shall take 
any action which states or implies that the accreditation body or its 
accredited laboratories are recognized by NIST in any testing or other 
area(s) beyond those for which NIST has approved the accreditation body 
under this regulation. Approved accreditation bodies shall not engage 
in misrepresentation of the scope or conditions of its approval by 
NIST.


Sec. 280.305  Voluntary termination of approval.

    At any time, an accreditation body may voluntarily terminate its 
program's approval by giving written notice to NIST and to all 
laboratories accredited by that body under its fastener laboratory 
accreditation program. The written notice shall state the date on which 
the termination will take effect.


Sec. 280.306  Involuntary termination of approval by NIST.

    (a) NIST may terminate or suspend its approval of an accreditation 
body if such an action is deemed to be in the public interest.
    (b) Before terminating the approval of an accreditation body, NIST 
will notify the accreditation body in writing, giving it the 
opportunity to rebut or correct the stated reasons for the proposed 
termination. If the problems are not corrected or reconciled within 30 
days, or such longer time as NIST in its sole discretion may grant, the 
termination shall become effective.
    (c) An accreditation body may appeal a termination to the Director 
by submitting a statement of reasons why the approval should not be 
terminated. NIST may, at its discretion, hold in abeyance the 
termination action pending a final decision by the Director. Within 
sixty days following receipt of the appeal, the Director shall inform 
the accreditation body in writing of his or her decision.
    (d) Fastener testing laboratories which have been listed by NIST in 
accordance with subpart B of this part, based on their accreditation by 
an accreditation body whose approval has terminated, shall be removed 
from the list, unless an exception is granted by NIST.

Subpart E--Recognition of Foreign Laboratories


Sec. 280.400  Introduction.

    In accordance with section 6(a)(1)(C) of the Act, this subpart sets 
forth the conditions under which the accreditation of foreign 
laboratories by their governments, by organizations acting on behalf of 
their governments, or by organizations recognized by the Director shall 
be deemed to meet the requirements of the Act.


Sec. 280.401  Recognition of foreign laboratories.

    Foreign entities wishing to be recognized to accredit fastener 
testing laboratories must submit an application for evaluation to NIST. 
NIST recognition is limited to bodies that accredit laboratories 
performing tests on materials or fasteners covered by the Act. To be 
recognized by NIST, accredited foreign laboratories must meet 
conditions set out in subpart C of this part, and applicable laboratory 
accreditation bodies must meet conditions set out in subparts D and F 
of this part.

Subpart F--Requirements for Fastener Laboratory Accreditation 
Bodies


Sec. 280.500  Introduction.

    This subpart sets out organizational, operational and other 
requirements that must be met by all accreditation bodies approved or 
recognized (hereafter ``approved/recognized'') by NIST under subpart D 
or E of this part. This subpart also sets out the requirements against 
which an approved/recognized accreditation body assesses the technical 
competence of an applicant testing laboratory. These requirements 
include conditions with respect to subpart C of this part.


Sec. 280.501  Accreditation bodies.

    (a) General provisions. (1) The procedures under which an approved/
recognized accreditation body operates shall be administered in a non-
discriminatory manner. Access to an accreditation system operated by an 
approved/recognized accreditation body shall not be conditional upon 
the size of the laboratory or membership in any association or group, 
nor shall there be undue financial conditions to restrict 
participation.
    (2) The competence of an applicant laboratory shall be assessed by 
an approved/recognized accreditation body against requirements 
consistent with the conditions set out in subpart C of this part.
    (3) The requirements of Sec. 280.501(a)(2) may have to be 
interpreted for a specific test or type of test by an approved/
recognized accreditation body. These interpretations shall be 
formulated by relevant and impartial committees or persons possessing 
the necessary technical competence. They shall be published by the 
accreditation body.
    (4) An approved/recognized accreditation body shall require 
accredited laboratories to maintain impartiality and integrity.
    (5) An approved/recognized accreditation body shall confine its 
requirements, assessment and decision on accreditation to those matters 
specifically related to the scope of the accreditation being 
considered.
    (b) Organization of an approved/recognized accreditation body
    (1) An approved/recognized accreditation body shall:
    (i) Be a legally identifiable, public or private entity;
    (ii) Have rights and responsibilities relevant to its accreditation 
activities;
    (iii) Have adequate arrangements to cover liabilities arising from 
its operations and/or activities;
    (iv) Have the financial stability and resources required for the 
operation of an accreditation system;
    (v) Have and make available on request a description of the means 
by which it receives its financial support;
    (vi) Employ a sufficient number of personnel having the necessary 
education, training, technical knowledge and experience for handling 
the type, range and volume of work performed, under a senior executive 
who is responsible to the organization, body or board to which it 
reports;
    (vii) Have a quality system including an organizational structure, 
that enables it to give confidence in its ability to operate a 
laboratory accreditation system satisfactorily;
    (viii) Have documented policies and procedures for the operation of 
the quality system that include:
    (A) Policies and decision-making procedures that distinguish 
between laboratory accreditation and any other activities in which the 
body is engaged;
    (B) Policies and procedures for the resolution of complaints and 
appeals

[[Page 50571]]

received from laboratories about the handling of accreditation matters, 
or from users of services about accredited laboratories or any other 
matters;
    (ix) Together with its senior executive, and staff, be free from 
any commercial, financial and other pressures which might influence the 
results of the accreditation process;
    (x) Have formal rules and structures for the appointment and 
operation of committees involved in the accreditation process; such 
committees shall be free from any commercial, financial and other 
pressures that might influence decisions or shall have a structure 
where members are chosen to provide impartiality through a balance of 
interest where no single interest predominates;
    (xi) Establish one or more technical committees, each responsible, 
within its scope, for advising the accreditation body on the technical 
matters relating to the operation of its accreditation system;
    (xii) Not offer consultancies or other services which may 
compromise the objectivity of its accreditation process and decisions;
    (xiii) Have arrangements that are consistent with applicable laws, 
to safeguard, at all levels of its organization (including committees), 
confidentiality of the information obtained relating to applications, 
assessment and accreditation of laboratories;
    (2) An approved/recognized accreditation body shall have 
arrangements for either controlling the ownership, use and display of 
the accreditation documents or controlling the manner in which an 
accredited laboratory may refer to its accredited status, or both.
    (c) Quality system. (1) An approved/recognized accreditation body 
shall operate a quality system appropriate to the type, range and 
volume of work performed. This system shall be documented and the 
documentation shall be available for use by the accreditation body 
staff. The accreditation body shall designate a person having direct 
access to its highest executive level, to take responsibility for the 
quality system and the maintenance of the quality documentation.
    (2) The quality system shall be documented in a quality manual and 
associated quality procedures, and the quality manual shall contain or 
refer to at least the following;
    (i) A quality policy statement;
    (ii) The organizational structure of the accreditation body;
    (iii) The operational and functional duties and services pertaining 
to quality, so that each person concerned will know the extent and the 
limits of their responsibility;
    (iv) Administrative procedures including document control;
    (v) Policies and procedures to implement the accreditation process;
    (vi) Arrangements for feedback and corrective actions whenever 
discrepancies are detected;
    (vii) The policy and procedures for dealing with appeals, 
complaints and disputes;
    (viii) The policy and procedures for conducting internal audits;
    (ix) The policy and the procedures for conducting quality system 
reviews;
    (x) The policy and the procedures for the recruitment and training 
of assessors and monitoring their performance.
    (3) An approved/recognized accreditation body shall audit its 
activities to verify that they comply with the requirements of the 
quality system. The quality system shall also be reviewed to ensure its 
continued effectiveness. Audits and reviews shall be carried out 
systematically and periodically and recorded together with details of 
any corrective actions taken.
    (4) An approved/recognized accreditation body shall maintain 
records to demonstrate that accreditation procedures have been 
effectively fulfilled, particularly with respect to application forms, 
assessment reports, and reports relating to granting, maintaining, 
extending, suspending or withdrawing accreditation. These accreditation 
documents shall form part of the record.
    (5) An approved/recognized accreditation body shall have a policy 
and procedures for retaining records. The records shall be retained for 
a period of at least 5 years, and shall be available to NIST personnel 
and other persons considered by the accreditation body to have a right 
of access to these records.
    (d) Granting, maintaining, extending, suspending, and withdrawing 
accreditation. (1) An approved/recognized accreditation body shall 
specify the conditions for granting, maintaining and extending 
accreditation and the conditions under which accreditation may be 
suspended or withdrawn, partially or in total for all or part of the 
laboratory's scope of accreditation.
    (2) An approved/recognized accreditation body shall have 
arrangements to grant, maintain, suspend or withdraw accreditation, 
increase or reduce the scope of accreditation or require reassessment, 
in the event of changes affecting the laboratory's activity and 
operation, such as changes in personnel or equipment, or if analysis of 
a complaint or any other information indicates that the laboratory no 
longer complies with the requirements of the accreditation body.
    (3) An approved/recognized accreditation body shall have 
arrangements relating to the transfer of accreditation when the legal 
status (e.g. ownership) of the accredited laboratory changes.
    (e) Documentation. An approved/recognized accreditation body shall 
provide (through publications, electronic media or other means), update 
at adequate intervals, and make available on request:
    (1) Information about the authority under which accreditation 
systems operated by the accreditation body were established and 
specifying whether they are mandatory or voluntary;
    (2) A document containing its requirements for accreditation in 
accordance with this document;
    (3) A document stating the arrangements for granting, maintaining, 
extending, suspending and withdrawing accreditation;
    (4) Information about the assessment and accreditation process;
    (5) General information on the fees charged to applicant and 
accredited laboratories;
    (6) A description of the rights and duties of accredited 
laboratories as specified in Sec. 280.504 of this part, including 
requirements, restrictions or limitations on the use of the accrediting 
body's logo and on the ways of referring to the accreditation granted.


Sec. 280.502  Laboratory assessors.

    (a) Requirements for assessors. The assessor or assessment team 
appointed to assess a laboratory shall:
    (1) Be familiar with the relevant legal regulations, accreditation 
procedures and accreditation requirements;
    (2) Have a thorough knowledge of the relevant assessment method and 
assessment documents;
    (3) Have appropriate technical knowledge of the specific tests or 
types of tests for which accreditation is sought and, where relevant, 
with the associated sampling procedures;
    (4) Be able to communicate effectively, both in writing and orally;
    (5) Be free of any commercial, financial or other pressures or 
conflicts of interest that might cause assessor(s) to act in other than 
an impartial or non-discriminatory manner;
    (6) Not have offered consultancies to laboratories which might 
compromise their impartiality in the accreditation process and 
decisions.
    (b) Qualification procedures for assessors. An approved/recognized

[[Page 50572]]

accreditation body shall have an adequate procedure for:
    (1) Qualifying assessors, comprising an assessment of their 
competence and training, and attendance at one or more actual 
assessments with a qualified assessor, and
    (2) Monitoring the performance of assessors.
    (c) Contracting of assessors. An approved/recognized accreditation 
body shall require the assessors to sign a contract or other document 
by which they commit themselves to comply with the rules defined by the 
accreditation body, including those relating to confidentiality and 
those relating to independence from commercial and other interests, and 
any prior association with laboratories to be assessed.
    (d) Assessor records. An approved/recognized accreditation body 
shall possess and maintain up-to-date records on assessors consisting 
of:
    (1) Name and address;
    (2) Organization affiliation and position held;
    (3) Educational qualification and professional status;
    (4) Work experience;
    (5) Training in quality assurance, assessment and calibration and 
testing;
    (6) Experience in laboratory assessment, together with field of 
competence;
    (7) Date of most recent updating of record.
    (e) Procedures for assessors. Assessors shall be provided with an 
up-to-date set of procedures giving assessment instructions and all 
relevant information on accreditation arrangements.


Sec. 280.503  Accreditation process.

    (a) Application for accreditation. (1) A detailed description of 
the assessment and accreditation procedure, the documents containing 
the requirements for accreditation and documents describing the rights 
and duties of accredited laboratories (including fees to be paid by 
applicant and accredited laboratories) shall be maintained up-to-date 
and given to applicant laboratories.
    (2) Additional relevant information shall be provided to applicant 
laboratories on request.
    (3) A duly authorized representative of the applicant laboratory 
shall be required to sign an official application form, in which or 
attached to which
    (i) The scope of the desired accreditation is clearly defined;
    (ii) The applicant's representative agrees to fulfill the 
accreditation procedure, especially to receive the assessment team, to 
pay the fees charged to the applicant laboratory whatever the result of 
the assessment may be, and to accept the charges of subsequent 
maintenance of the accreditation of the laboratory;
    (iii) the applicant agrees to comply with the requirements for 
accreditation and to supply any information needed for the evaluation 
of the laboratory.
    (4)(i) The following minimum information shall be provided by the 
applicant laboratory prior to the on-site assessment:
    (A) The general features of the applicant laboratory (corporate 
entity: Name, address, legal status, human and technical resources);
    (B) General information concerning the laboratory covered by the 
application, such as primary function, relationship in a larger 
corporate entity and, If applicable, physical location of laboratories 
involved;
    (C) A definition of the materials or products tested, the methods 
used and the tests performed;
    (D) A copy of the laboratory's quality manual and, where required, 
the associated documentation.
    (ii) The information gathered shall be used for the preparation of 
on-site assessment and shall be treated with appropriate 
confidentiality.
    (b) Assessment. (1) An approved/recognized accreditation body shall 
appoint qualified assessor(s) to evaluate all material collected from 
the applicant and to conduct the assessment on its behalf at the 
laboratory and any other sites where activities to be covered by the 
accreditation are performed.
    (2) To ensure that a comprehensive and correct assessment is 
carried out, each assessor shall be provided with the appropriate 
working documents.
    (3) The date of assessment shall be mutually agreed with the 
applicant laboratory. The latter shall be informed of the name(s) of 
the qualified assessor(s) nominated to carry out the assessment, with 
sufficient notice so that the laboratory is given an opportunity to 
appeal against the appointment of any particular assessor.
    (4) The assessor(s) shall be formally appointed. A lead assessor 
shall be appointed, if relevant. The mandate given to the assessor(s) 
shall be clearly defined and made known to the applicant laboratory.
    (c) Sub-contracting of assessment. (1) If an approved/recognized 
accreditation body decides to delegate fully or partially the 
assessment of a laboratory to another body, then the accreditation body 
shall take full responsibility for such an assessment made on its 
behalf.
    (2) An approved/recognized accreditation body shall ensure that the 
party to which assessment has been delegated is approved/recognized by 
NIST.
    (d) Assessment report. (1) An approved/recognized accreditation 
body may adopt reporting procedures that suit its needs but as a 
minimum these procedures shall ensure that:
    (i) A meeting takes place between the assessor or assessment team 
and the laboratory management prior to leaving the laboratory at which 
the assessment team provides a written or oral report on the compliance 
of the applicant laboratory with the accreditation requirements;
    (ii) The assessor or assessment team provides the accreditation 
body with a detailed assessment report containing all relevant 
information concerning the ability of the applicant laboratory to 
comply with all of the accreditation requirements, including any which 
may come about from the results of proficiency testing;
    (iii) A report on the outcome of the assessment is promptly brought 
to the applicant laboratory's notice by the accreditation body, 
identifying any non-compliances that have to be discharged in order to 
comply with all of the accreditation requirements. The laboratory shall 
be invited to present its comments on this report and to describe the 
specific actions taken, or planned to be taken within a defined time, 
to remedy any non-compliances with the accreditation requirements 
identified during the assessment.
    (2) The final report authorized by an approved/recognized 
accreditation body and submitted to the laboratory, if it is different, 
shall include as a minimum:
    (i) Date(s) of assessment(s);
    (ii) The names of the person(s) responsible for the report;
    (iii) The names and addresses of all the laboratory sites assessed;
    (iv) The assessed scope of accreditation or reference thereto;
    (v) comments of the assessor(s) or assessment team on the 
compliance of the applicant laboratory with the accreditation 
requirements.
    (3) The reports shall take into consideration:
    (i) The technical qualification, experience and authority of the 
staff encountered, especially the persons responsible for the technical 
validity of test reports or test certificates;
    (ii) The adequacy of the internal organization and procedures 
adopted by the applicant laboratory to give confidence in the quality 
of its services, the physical facilities, i.e., the environment and the 
calibration/test equipment of the laboratory including maintenance and 
calibration having

[[Page 50573]]

regard to the volume of work undertaken;
    (iii) Proficiency testing or other interlaboratory comparison 
performed by the applicant laboratory, the results of this proficiency 
testing, and the use of these results by the laboratory;
    (iv) The actions taken to correct any non-compliances identified at 
previous assessments.
    (e) Decision on accreditation. (1) The decision whether or not to 
accredit a laboratory shall be taken by an approved/recognized 
accreditation body on the basis of the information gathered during the 
accreditation process.
    (2) An approved/recognized accreditation body shall not delegate 
its responsibility for granting, maintaining, extending, suspending or 
withdrawing accreditation.
    (f) Granting accreditation. (1) An approved/recognized 
accreditation body shall transmit to each accredited laboratory formal 
accreditation documents such as a letter or a certificate signed by an 
officer who has been assigned such responsibility. These formal 
accreditation documents shall permit identification of--
    (i) The name and address of the laboratory that has been 
accredited;
    (ii) The scope of the accreditation including:
    (A) The tests or types of test for which accreditation has been 
granted;
    (B) For tests, the materials or products tested, the methods used 
and the tests performed;
    (C) For specific tests for which accreditation has been granted the 
methods used defined by written standards or reference documents that 
have been accepted by the accreditation body.
    (iii) Where appropriate, the persons recognized by the 
accreditation body as being responsible for the test certificates or 
the test reports;
    (iv) The term of accreditation which shall be valid for a period 
not to exceed three years;
    (v) The accredited laboratory by a unique number.
    (2) An approved/recognized accreditation body shall furnish 
notification to NIST required by Subpart B of this part.
    (g) Surveillance and reassessment of accredited laboratories. (1) 
An approved/recognized accreditation body shall have an established 
documented program consistent with the accreditation granted for 
carrying out periodic surveillance and reassessment at sufficiently 
close intervals to ensure that its accredited laboratories continue to 
comply with the accreditation requirements.
    (2) Surveillance and reassessment procedures shall be consistent 
with those concerning the assessment of laboratories as described in 
this Subpart.
    (h) Proficiency testing. (1) The approved/recognized accreditation 
body shall require each fastener testing laboratory it accredits, and 
each laboratory which has applied to it for accreditation to 
participate in proficiency testing comparable to that conducted under 
Subpart C of this part by NVLAP.
    (2) Although an accreditation shall not be granted or maintained 
only on the basis of the results of proficiency testing, accreditation 
shall not be granted or maintained if required proficiency testing 
participation is unsatisfactory.
    (i) Certificates or reports issued by accredited laboratories. (1) 
An approved/recognized accreditation body shall normally allow an 
accredited laboratory to refer to its accreditation in test reports and 
test certificates that contain only the results of tests or types of 
test for which accreditation is held.
    (2) An approved/recognized accreditation body shall have a policy 
that defines the circumstances in which accredited laboratories are 
permitted to include in test reports or test certificates, the results 
of tests for which accreditation is not held and the results of sub-
contracted tests.


Sec. 280.504  Relationship between approved/recognized accreditation 
body and laboratory.

    (a) An approved/recognized accreditation body shall have 
arrangements to ensure that the laboratory and its representatives 
afford such accommodation and co-operation as is necessary, to enable 
the accreditation body to verify compliance with the requirements for 
accreditation. These arrangements shall include provision for 
examination of documentation and access to all testing areas, records 
and personnel for the purposes of assessment, surveillance, 
reassessment and resolution of complaints.
    (b) An approved/recognized accreditation body shall require that an 
accredited laboratory--
    (1) At all times complies with the relevant provisions of these 
regulations;
    (2) Claims that it is accredited only in respect of services for 
which it has been granted accreditation and which are carried out in 
accordance with these conditions;
    (3) Pays such fees as shall be determined by the accreditation 
body;
    (4) Does not use its accreditation in such a manner as to bring the 
accreditation body into disrepute and does not make any statement 
relevant to its accreditation which the accreditation body may consider 
misleading or unauthorized;
    (5) Upon suspension or withdrawal of its accreditation (however 
determined) forthwith discontinues its use of all advertising matter 
that contains any reference thereto and return any certificates of 
accreditation to the accreditation body;
    (6) Does not use its accreditation to state or imply any product 
approval by the accreditation body or any agency of the United States 
Government;
    (7) Endeavors to ensure that no certificate or report nor any part 
thereof is used in a misleading manner;
    (8) In making reference to its accreditation status in 
communication media such as advertising, brochures or other documents, 
complies with the requirements of the accreditation body.
    (c) Notification of change. (1) An approved/recognized 
accreditation body shall have arrangements to ensure that an accredited 
laboratory informs it without delay of changes in any aspect of the 
laboratory's status or operation that affects the laboratory's:
    (i) Legal, commercial or organizational status;
    (ii) Organization and management, e.g., key managerial staff;
    (iii) Policies or procedures, where appropriate;
    (iv) Premises;
    (v) Personnel, equipment, facilities, working environment or other 
resources, where significant;
    (vi) Authorized signatories;
    (vii) Or other such matters that may affect the laboratory's 
capability, or scope of accredited activities, or compliance with the 
requirements in this document or any other relevant criteria of 
competence specified by the accreditation body.
    (2) Upon receipt of due notice of any intended changes relating to 
the requirements of this document, the relevant criteria of competence 
and any other requirements prescribed by the accreditation body, the 
accreditation body shall ensure that the laboratory carries out the 
necessary adjustments to its procedures within such time, as in the 
opinion of the body is reasonable. The laboratory shall notify the body 
when such adjustments have been made.
    (d) Directory of accredited laboratories. An approved/recognized 
accreditation body shall produce periodically but at least annually a

[[Page 50574]]

directory of accredited laboratories describing the accreditation 
granted.

Subpart G--Enforcement


 Sec. 280.600  Scope.

    Section 280.601 of this part lists definitions used in this part. 
Section 280.602 of this part specifies that failure to take any action 
required by or taking any action prohibited by this part constitutes a 
violation of this part. Section 280.603 describes the penalties that 
may be imposed for violations of this part. Sections 280.605 through 
280.623 establish the procedures for imposing administrative penalties 
for violations of this part.


Sec. 280.601  Definitions used in this subpart.

    The definitions in this Sec. 280.601 apply to this part.
    Administrative law judge (ALJ). The person authorized to conduct 
hearings in administrative enforcement proceedings brought under the 
Act.
    Assistant Secretary. The Assistant Secretary for Export 
Enforcement, Bureau of Export Administration.
    Department. The United States Department of Commerce, specifically, 
the Bureau of Export Administration, NIST and the Patent and Trademark 
Office.
    Final decision. A decision or order assessing a civil penalty or 
otherwise disposing of or dismissing a case, which is not subject to 
further review under this part, but which is subject to collection 
proceedings or judicial review in an appropriate Federal district court 
as authorized by law.
    Initial decision. A decision of the administrative law judge which 
is subject to review by the Under Secretary for Export Administration, 
but which becomes the final decision of the Department in the absence 
of such an appeal.
    Party. The Department and any person named as a respondent under 
this part.
    Respondent. Any person named as the subject of a charging letter, 
proposed charging letter, or other order proposed or issued under this 
part.
    Under Secretary. The Under Secretary for Export Administration, 
United States Department of Commerce.


Sec. 280.602  Violations.

    (a) Engaging in prohibited conduct. No person may engage in any 
conduct prohibited by or contrary to, or refrain from engaging in any 
action required by the Act, this part, or any order issued thereunder.
    (b) Causing, aiding, or abetting a violation. No person may cause 
or aid, abet, counsel, command, induce, procure, or permit the doing of 
any act prohibited, or the omission of any act required, by the Act, 
this part, or any order issued thereunder.
    (c) Solicitation and attempt. No person may solicit or attempt a 
violation of the Act, this part, or any order issued thereunder.
    (d) Conspiracy. No person may conspire or act in concert with one 
or more persons in any manner or for any purpose to bring about or to 
do any act that constitutes a violation of the Act, this part, or any 
order issued thereunder.
    (e) Misrepresentation and concealment of facts. No person may make 
any false or misleading representation, statement, or certification, or 
falsify or conceal any material fact, either directly to NIST, or the 
Bureau of Export Administration, the Patent and Trademark Office, or 
any official of any other United States agency, or indirectly through 
any other person:
    (1) In the course of an investigation or other action subject to 
the Act and this part; or
    (2) In connection with the preparation, submission, issuance, use, 
maintenance of a laboratory test report, certificate of conformance as 
described in Secs. 280.5 and 280.6 of this part; or
    (3) In connection with any application for laboratory accreditation 
as described in Sec. 280.205 of this part; or
    (4) In connection with an application to be an accreditation body 
as described in Sec. 280.301 of this part.
    (f) Falsification of test report. No person shall falsify or make 
any false or misleading statement on or in connection with a laboratory 
test report required by section 5(c) of the Act or Sec. 280.6 of this 
part.
    (g) Falsification of certificate of conformance. No person shall 
falsify or make any false or misleading statement on or in connection 
with a certificate of conformance required by Sec. 280.5 of this part.
    (h) Falsification of documents relating to laboratory accreditation 
or accreditation bodies. No person shall falsify or make any false or 
misleading statement on or in connection with any document relating to 
laboratory accreditation or approval or recognition of accreditation 
bodies as required by sections 6(a) or 6(b) of the Act or this part.
    (i) Use of another person's recorded insignia. No person may apply 
an insignia to a fastener if the Commissioner has issued a certificate 
of recordal (as described in Sec. 280.712 of this part) for that 
insignia to another person without written permission from the person 
to whom the certificate was issued.
    (j) False claim of laboratory accreditation or accreditation body. 
No person shall falsely claim to be an accredited laboratory or 
approved or recognized accreditation body as described in section 6 of 
the Act or subparts B, C, D, and E of this part.


Sec. 280.603  Penalties, remedies and sanctions.

    (a) Civil remedies. The Attorney General may bring an action in an 
appropriate United States district court for declaratory and injunctive 
relief against any person who violates the Act or any regulation issued 
thereunder. Such action may not be brought more than 10 years after the 
cause of action accrues.
    (b) Civil penalties. Any person who is determined, after notice and 
opportunity for a hearing, to have violated the Act or any regulation 
issued thereunder shall be liable to the United States for a civil 
penalty of not more than $25,000 for each violation.
    (c) Criminal penalties. (1) Whoever knowingly certifies, marks, 
offers for sale, or sells a fastener in violation of the Act or a 
regulation issued thereunder shall be fined under title 18, United 
States Code, or imprisoned not more than 5 years, or both.
    (2) Whoever intentionally fails to maintain records relating to a 
fastener in violation of the Act or a regulation issued thereunder 
shall be fined under title 18, United States Code, or imprisoned not 
more than five years or both.
    (3) Whoever negligently fails to maintain records relating to a 
fastener in violation of the Act or a regulation issued thereunder 
shall be fined under title 18, United States Code, or imprisoned not 
more than two years or both.


Sec. 280.604  Administrative enforcement proceedings.

    Sections 280.605 through 280.623 set forth the procedures for 
imposing administrative penalties for violations of the Act and 
Fastener Quality Regulations (FQR).


Sec. 280.605  Institution of administrative enforcement proceedings.

    (a) Charging letters. The Director of the Office of Export 
Enforcement (OEE) may begin administrative enforcement proceedings 
under this part by issuing a charging letter. The charging letter shall 
constitute the formal complaint and will state that there is reason to 
believe that a violation of this part has occurred. It will set forth 
the essential

[[Page 50575]]

facts about each alleged violation, refer to the specific regulatory or 
other provisions involved, and give notice of the sanctions available 
under the Act and this part. The charging letter will inform the 
respondent that failure to answer the charges as provided in 
Sec. 280.608 of this part will be treated as a default under 
Sec. 280.609 of this part, that the respondent is entitled to a hearing 
if a written demand for one is requested with the answer, and that the 
respondent may be represented by counsel, or by other authorized 
representative. A copy of the charging letter shall be filed with the 
administrative law judge, which filing shall toll the running of the 
applicable statute of limitations. Charging letters may be amended or 
supplemented at any time before an answer is filed, or, with permission 
of the administrative law judge, afterwards. The Department may 
unilaterally withdraw charging letters at any time, by notifying the 
respondent and the administrative law judge.
    (b) Notice of issuance of charging letter instituting 
administrative enforcement proceeding. A respondent shall be notified 
of the issuance of a charging letter, or any amendment or supplement 
thereto:
    (1) By mailing a copy by registered or certified mail addressed to 
the respondent at the respondent's last known address;
    (2) By leaving a copy with the respondent or with an officer, a 
managing or general agent, or any other agent authorized by appointment 
or by law to receive service of process for the respondent; or
    (3) By leaving a copy with a person of suitable age and discretion 
who resides at the respondent's last known dwelling.
    (4) Delivery of a copy of the charging letter, if made in the 
manner described in paragraph (b)(2) or (3) of this section, shall be 
evidenced by a certificate of service signed by the person making such 
service, stating the method of service and the identity of the person 
with whom the charging letter was left. The certificate of service 
shall be filed with the administrative law judge.
    (c) Date. The date of service of notice of the issuance of a 
charging letter instituting an administrative enforcement proceeding, 
or service of notice of the issuance of a supplement or amendment to a 
charging letter, is the date of its delivery, or of its attempted 
delivery if delivery is refused.


Sec. 280.606  Representation.

    A respondent individual may appear and participate in person, a 
corporation by a duly authorized officer or employee, and a partnership 
by a partner. If a respondent is represented by counsel, counsel shall 
be a member in good standing of the bar of any State, Commonwealth or 
Territory of the United States, or of the District of Columbia, or be 
licensed to practice law in the country in which counsel resides if not 
the United States. A respondent personally, or through counsel or other 
representative who has the power of attorney to represent the 
respondent, shall file a notice of appearance with the administrative 
law judge. The Department will be represented by the Office of Chief 
Counsel for Export Administration, U.S. Department of Commerce.


Sec. 280.607  Filing and service of papers other than charging letter.

    (a) Filing. All papers to be filed shall be addressed to ``FQA 
Administrative Enforcement Proceedings,'' at the address set forth in 
the charging letter, or such other place as the administrative law 
judge may designate. Filing by United States mail, first class postage 
prepaid, by express or equivalent parcel delivery service, or by hand 
delivery, is acceptable. Filing by mail from a foreign country shall be 
by airmail. In addition, the administrative law judge may authorize 
filing of papers by facsimile or other electronic means, provided that 
a hard copy of any such paper is subsequently filed. A copy of each 
paper filed shall be simultaneously served on each party.
    (b) Service. Service shall be made by personal delivery or by 
mailing one copy of each paper to each party in the proceeding. Service 
by delivery service or facsimile, in the manner set forth in paragraph 
(a) of this section, is acceptable. Service on the Department shall be 
addressed to the Chief Counsel for Export Administration, Room H-3839, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC. 20230. Service on a respondent shall be to the address 
to which the charging letter was sent or to such other address as 
respondent may provide. When a party has appeared by counsel or other 
representative, service on counsel or other representative shall 
constitute service on that party.
    (c) Date. The date of filing or service is the day when the papers 
are deposited in the mail or are delivered in person, by delivery 
service, or by facsimile.
    (d) Certificate of service. A certificate of service signed by the 
party making service, stating the date and manner of service, shall 
accompany every paper, other than the charging letter, filed and served 
on parties.
    (e) Computing period of time. In computing any period of time 
prescribed or allowed by this part or by order of the administrative 
law judge or the Under Secretary, the day of the act, event, or default 
from which the designated period of time begins to run is not to be 
included. The last day of the period so computed is to be included 
unless it is a Saturday, a Sunday, or a legal holiday (as defined in 
Rule 6(a) of the Federal Rules of Civil Procedure), in which case the 
period runs until the end of the next day which is neither a Saturday, 
a Sunday, nor a legal holiday. Intermediate Saturdays, Sundays, and 
legal holidays are excluded from the computation when the period of 
time prescribed or allowed is seven days or less.


Sec. 280.608  Answer and demand for hearing.

    (a) When to answer. The respondent must answer the charging letter 
within 30 days after being served with notice of the issuance of a 
charging letter instituting an administrative enforcement proceeding, 
or within 30 days of notice of any supplement or amendment to a 
charging letter, unless time is extended under Sec. 280.618 of this 
part.
    (b) Contents of answer. The answer must be responsive to the 
charging letter and must fully set forth the nature of the respondent's 
defense or defenses. The answer must admit or deny specifically each 
separate allegation of the charging letter; if the respondent is 
without knowledge, the answer must so state and will operate as a 
denial. Failure to deny or controvert a particular allegation will be 
deemed an admission of that allegation. The answer must also set forth 
any additional or new matter the respondent believes supports a defense 
or claim of mitigation. Any defense or partial defense not specifically 
set forth in the answer shall be deemed waived, and evidence thereon 
may be refused, except for good cause shown.
    (c) Demand for hearing. If the respondent desires a hearing, a 
written demand for one must be submitted with the answer. Any demand by 
the Department for a hearing must be filed with the administrative law 
judge within 30 days after service of the answer. Failure to make a 
timely written demand for a hearing shall be deemed a waiver of the 
party's right to a hearing, except for good cause shown. If no party 
demands a hearing, the matter will go forward in accordance with the 
procedures set forth in Sec. 280.617 of this part.

[[Page 50576]]

    (d) English language required. The answer, all other papers, and 
all documentary evidence must be submitted in English, or translations 
into English must be filed and served at the same time.


Sec. 280.609  Default.

    (a) General. Failure of the respondent to file an answer within the 
time provided constitutes a waiver of the respondent's right to appear 
and contest the allegations in the charging letter. In such event, the 
administrative law judge, on the Department's motion and without 
further notice to the respondent, shall find the facts to be as alleged 
in the charging letter and render an initial decision containing 
findings of fact and appropriate conclusions of law and issue an 
initial decision and order imposing appropriate sanctions. The decision 
and order may be appealed to the Under Secretary in accordance with the 
applicable procedures set forth in Sec. 280.623 of this part.
    (b) Petition to set aside default.--(1) Procedure. Upon petition 
filed by a respondent against whom a default order has been issued, 
which petition is accompanied by an answer meeting the requirements of 
280.608(b) of this part, the Under Secretary may, after giving all 
parties an opportunity to comment, and for good cause shown, set aside 
the default and vacate the order entered thereon and remand the matter 
to the administrative law judge for further proceedings.
    (2) Time limits. A petition under this section must be made within 
one year of the date of entry of the order which the petition seeks to 
have vacated.


Sec. 280.610  Summary decision.

    At any time after a proceeding has been initiated, a party may move 
for a summary decision disposing of some or all of the issues. The 
administrative law judge may render an initial decision and issue an 
order if the entire record shows, as to the issue(s) under 
consideration:
    (a) That there is no genuine issue as to any material fact; and
    (b) That the moving party is entitled to a summary decision as a 
matter of law.


Sec. 280.611  Discovery.

    (a) General. The parties are encouraged to engage in voluntary 
discovery regarding any matter, not privileged, which is relevant to 
the subject matter of the pending proceeding. The provisions of the 
Federal Rules of Civil Procedure relating to discovery apply to the 
extent consistent with this part and except as otherwise provided by 
the administrative law judge or by waiver or agreement of the parties. 
The administrative law judge may make any order which justice requires 
to protect a party or person from annoyance, embarrassment, oppression, 
or undue burden or expense. These orders may include limitations on the 
scope, method, time and place of discovery, and provisions for 
protecting the confidentiality of classified or otherwise sensitive 
information.
    (b) Interrogatories and requests for admission or production of 
documents. A party may serve on any party interrogatories, requests for 
admission, or requests for production of documents for inspection and 
copying, and a party concerned may apply to the administrative law 
judge for such enforcement or protective order as that party deems 
warranted with respect to such discovery. The service of a discovery 
request shall be made at least 20 days before the scheduled date of the 
hearing unless the administrative law judge specifies a shorter time 
period. Copies of interrogatories, requests for admission and requests 
for production of documents and responses thereto shall be served on 
all parties, and a copy of the certificate of service shall be filed 
with the administrative law judge. Matters of fact or law of which 
admission is requested shall be deemed admitted unless, within a period 
designated in the request (at least 10 days after service, or within 
such additional time as the administrative law judge may allow), the 
party to whom the request is directed serves upon the requesting party 
a sworn statement either denying specifically the matters of which 
admission is requested or setting forth in detail the reasons why the 
party to whom the request is directed cannot truthfully either admit or 
deny such matters.
    (c) Depositions. Upon application of a party and for good cause 
shown, the administrative law judge may order the taking of the 
testimony of any person by deposition and the production of specified 
documents or materials by the person at the deposition. The application 
shall state the purpose of the deposition and set forth the facts 
sought to be established through the deposition.
    (d) Enforcement. The administrative law judge may order a party to 
answer designated questions, to produce specified documents or things 
or to take any other action in response to a proper discovery request. 
If a party does not comply with such an order, the administrative law 
judge may make a determination or enter any order in the proceeding as 
the ALJ deems reasonable and appropriate. The ALJ may strike related 
charges or defenses in whole or in part or may take particular facts 
relating to the discovery request to which the party failed or refused 
to respond as being established for purposes of the proceeding in 
accordance with the contentions of the party seeking discovery. In 
addition, enforcement by a district court of the United States may be 
sought under section 9(b)(6) of the Act.


Sec. 280.612  Subpoenas.

    (a) Issuance. Upon the application of any party, supported by a 
satisfactory showing that there is substantial reason to believe that 
the evidence would not otherwise be available, the administrative law 
judge may issue subpoenas requiring the attendance and testimony of 
witnesses and the production of such books, records or other 
documentary or physical evidence for the purpose of the hearing, as the 
ALJ deems relevant and material to the proceedings, and reasonable in 
scope. Witnesses summoned shall be paid the same fees and mileage that 
are paid to witnesses in the courts of the United States. In case of 
contempt or refusal to obey a subpoena served upon any person pursuant 
to this paragraph, the district court of the United States for any 
district in which such person is found, resides, or transacts business, 
upon application by the United States and after notice to such person, 
shall have jurisdiction to issue an order requiring such person to 
appear and give testimony before the administrative law judge or to 
appear and produce documents before the administrative law judge, or 
both, and any failure to obey such order of the court may be punished 
by such court as contempt thereof.
    (b) Service. Subpoenas issued by the administrative law judge may 
be served in any of the methods set forth in Sec. 280.607(b) of this 
part.
    (c) Timing. Applications for subpoenas must be submitted at least 
10 days before the scheduled hearing or deposition, unless the 
administrative law judge determines, for good cause shown, that 
extraordinary circumstances warrant a shorter time.


Sec. 280.613  Matter protected against disclosure.

    (a) Protective measures. The administrative law judge may limit 
discovery or introduction of evidence or issue such protective or other 
orders as in the ALJ's judgment may be needed to prevent undue 
disclosure of classified or sensitive documents or information.

[[Page 50577]]

Where the administrative law judge determines that documents containing 
the classified or sensitive matter need to be made available to a party 
to avoid prejudice, the ALJ may direct that an unclassified and/or 
nonsensitive summary or extract of the documents be prepared. The 
administrative law judge may compare the extract or summary with the 
original to ensure that it is supported by the source document and that 
it omits only so much as must remain undisclosed. The summary or 
extract may be admitted as evidence in the record.
    (b) Arrangements for access. If the administrative law judge 
determines that this procedure is unsatisfactory and that classified or 
otherwise sensitive matter must form part of the record in order to 
avoid prejudice to a party, the administrative law judge may provide 
the parties an opportunity to make arrangements that permit a party or 
a representative to have access to such matter without compromising 
sensitive information. Such arrangements may include obtaining security 
clearances or giving counsel for a party access to sensitive 
information and documents subject to assurances against further 
disclosure, including a protective order, if necessary.


Sec. 280.614  Prehearing conference.

    (a) The administrative law judge, on his or her own motion or on 
request of a party, may direct the parties to participate in a 
prehearing conference, either in person or by telephone, to consider:
    (1) Simplification of issues;
    (2) The necessity or desirability of amendments to pleadings;
    (3) Obtaining stipulations of fact and of documents to avoid 
unnecessary proof; or
    (4) Such other matters as may expedite the disposition of the 
proceedings.
    (b) The administrative law judge may order the conference 
proceedings to be recorded electronically or taken by a reporter, 
transcribed and filed with the ALJ.
    (c) If a prehearing conference is impracticable, the administrative 
law judge may direct the parties to correspond with the ALJ to achieve 
the purposes of such a conference.
    (d) The administrative law judge will prepare a summary of any 
actions agreed on or taken pursuant to this section. The summary will 
include any written stipulations or agreements made by the parties.


Sec. 280.615  Hearings.

    (a) Scheduling. The administrative law judge, by agreement with the 
parties or upon notice to all parties of not less than 30 days, will 
schedule a hearing. All hearings will be held in Washington, DC., 
unless the administrative law judge determines, for good cause shown, 
that another location would better serve the interests of justice.
    (b) Hearing procedure. Hearings will be conducted in a fair and 
impartial manner by the administrative law judge, who may limit 
attendance at any hearing or portion thereof to the parties, their 
representatives and witnesses if the administrative law judge deems 
this necessary or advisable in order to protect sensitive matter (see 
Sec. 280.613 of this part) from improper disclosure. The rules of 
evidence prevailing in courts of law do not apply, and all evidentiary 
material deemed by the administrative law judge to be relevant and 
material to the proceeding and not unduly repetitious will be received 
and given appropriate weight.
    (c) Testimony and record. Witnesses will testify under oath or 
affirmation. A verbatim record of the hearing and of any other oral 
proceedings will be taken by reporter or by electronic recording, 
transcribed and filed with the administrative law judge. A respondent 
may examine the transcript and may obtain a copy by paying any 
applicable costs. Upon such terms as the administrative law judge deems 
just, the ALJ may direct that the testimony of any person be taken by 
deposition and may admit an affidavit or declaration as evidence, 
provided that any affidavits or declarations have been filed and served 
on the parties sufficiently in advance of the hearing to permit a party 
to file and serve an objection thereto on the grounds that it is 
necessary that the affiant or declarant testify at the hearing and be 
subject to cross-examination.
    (d) Failure to appear. If a party fails to appear in person or by 
counsel at a scheduled hearing, the hearing may nevertheless proceed, 
and that party's failure to appear will not affect the validity of the 
hearing or any proceedings or action taken thereafter.


Sec. 280.616  Interlocutory review of rulings.

    (a) At the request of a party, or on the administrative law judge's 
own initiative, the administrative law judge may certify to the Under 
Secretary for review a ruling that does not finally dispose of a 
proceeding, if the administrative law judge determines that immediate 
review may hasten or facilitate the final disposition of the matter.
    (b) Upon certification to the Under Secretary of the interlocutory 
ruling for review, the parties will have 10 days to file and serve 
briefs stating their positions, and five days to file and serve 
replies, following which the Under Secretary will decide the matter 
promptly.


Sec. 280.617  Proceeding without a hearing.

    If the parties have waived a hearing, the case will be decided on 
the record by the administrative law judge. Proceeding without a 
hearing does not relieve the parties from the necessity of proving the 
facts supporting their charges or defenses. Affidavits or declarations, 
depositions, admissions, answers to interrogatories and stipulations 
may supplement other documentary evidence in the record. The 
administrative law judge will give each party reasonable opportunity to 
file rebuttal evidence.


Sec. 280.618  Procedural stipulations; extension of time.

    (a) Procedural stipulations. Unless otherwise ordered, a written 
stipulation agreed to by all parties and filed with the administrative 
law judge will modify any procedures established by this part.
    (b) Extension of time. (1) The parties may extend any applicable 
time limitation, by stipulation filed with the administrative law judge 
before the time limitation expires.
    (2) The administrative law judge may, on the judge's own initiative 
or upon application by any party, either before or after the expiration 
of any applicable time limitation, extend the time within which to file 
and serve an answer to a charging letter or do any other act required 
by this part.


Sec. 280.619  Decision of the administrative law judge.

    (a) Predecisional matters. Except for default proceedings under 
Sec. 280.609 of this part, the administrative law judge will give the 
parties reasonable opportunity to submit the following, which will be 
made a part of the record:
    (1) Exceptions to any ruling by the judge or to the admissibility 
of evidence proffered at the hearing;
    (2) Proposed findings of fact and conclusions of law;
    (3) Supporting legal arguments for the exceptions and proposed 
findings and conclusions submitted; and
    (4) A proposed order.
    (b) Decision and order. After considering the entire record in the 
proceeding, the administrative law judge will issue a written initial 
decision. The decision will include

[[Page 50578]]

findings of fact, conclusions of law, and findings as to whether there 
has been a violation of the Act, this part, or any order issued 
thereunder. If the administrative law judge finds that the evidence of 
record is insufficient to sustain a finding that a violation has 
occurred with respect to one or more charges, the ALJ shall order 
dismissal of the charges in whole or in part, as appropriate. If the 
administrative law judge finds that one or more violations have been 
committed, the ALJ may issue an order imposing administrative 
sanctions, as provided in this part. The decision and order shall be 
served on each party, and shall become effective as the final decision 
of the Department 30 days after service, unless an appeal is filed in 
accordance with Sec. 280.623 of this part. In determining the amount of 
any civil penalty the ALJ shall consider the nature, circumstances and 
gravity of the violation and, with respect to the person found to have 
committed the violation, the degree of culpability, any history of 
prior violations, the effect on ability to continue to do business, any 
good faith attempt to achieve compliance, ability to pay the penalty, 
and such other matters as justice may require.
    (c) Suspension of sanctions. Any order imposing administrative 
sanctions may provide for the suspension of the sanction imposed, in 
whole or in part and on such terms of probation or other conditions as 
the administrative law judge or the Under Secretary may specify. Any 
suspension order may be modified or revoked by the signing official 
upon application by the Department showing a violation of the 
probationary terms or other conditions, after service on the respondent 
of notice of the application in accordance with the service provisions 
of Sec. 280.607 of this part, and with such opportunity for response as 
the responsible signing official in his/her discretion may allow. A 
copy of any order modifying or revoking the suspension shall also be 
served on the respondent in accordance with the provisions of 
Sec. 280.607 of this part.


Sec. 280.620  Settlement.

    (a) Cases may be settled before service of a charging letter. In 
cases in which settlement is reached before service of a charging 
letter, a proposed charging letter will be prepared, and a settlement 
proposal consisting of a settlement agreement and order will be 
submitted to the Assistant Secretary for approval and signature. If the 
Assistant Secretary does not approve the proposal, he/she will notify 
the parties and the case will proceed as though no settlement proposal 
had been made. If the Assistant Secretary approves the proposal, he/she 
will issue an appropriate order, and no action will be required by the 
administrative law judge.
    (b) Cases may also be settled after service of a charging letter. 
(1) If the case is pending before the administrative law judge, the ALJ 
shall stay the proceedings for a reasonable period of time, usually not 
to exceed 30 days, upon notification by the parties that they have 
entered into good faith settlement negotiations. The administrative law 
judge may, in his/her discretion, grant additional stays. If settlement 
is reached, a proposal will be submitted to the Assistant Secretary for 
approval and signature. If the Assistant Secretary approves the 
proposal, he/she will issue an appropriate order, and notify the 
administrative law judge that the case is withdrawn from adjudication. 
If the Assistant Secretary does not approve the proposal, he/she will 
notify the parties and the case will proceed to adjudication by the 
administrative law judge as though no settlement proposal had been 
made.
    (2) If the case is pending before the Under Secretary under 
Sec. 280.623 of this part, the parties may submit a settlement proposal 
to the Under Secretary for approval and signature. If the Under 
Secretary approves the proposal, he/she will issue an appropriate 
order. If the Under Secretary does not approve the proposal, the case 
will proceed to final decision in accordance with Section 280.623 of 
this part, as appropriate.
    (c) Any order disposing of a case by settlement may suspend the 
administrative sanction imposed, in whole or in part, on such terms of 
probation or other conditions as the signing official may specify. Any 
such suspension may be modified or revoked by the signing official, in 
accordance with the procedures set forth in Sec. 280.619(c) of this 
part.
    (d) Any respondent who agrees to an order imposing any 
administrative sanction does so solely for the purpose of resolving the 
claims in the administrative enforcement proceeding brought under this 
part. This reflects the fact that the Department has neither the 
authority nor the responsibility for instituting, conducting, settling, 
or otherwise disposing of criminal proceedings. That authority and 
responsibility is vested in the Attorney General and the Department of 
Justice.
    (e) Cases that are settled may not be reopened or appealed.


Sec. 280.621  Reopening.

    The respondent may petition the administrative law judge within one 
year of the date of the final decision, except where the decision 
arises from a default judgment or from a settlement, to reopen an 
administrative enforcement proceeding to receive any relevant and 
material evidence which was unknown or unobtainable at the time the 
proceeding was held. The petition must include a summary of such 
evidence, the reasons why it is deemed relevant and material, and the 
reasons why it could not have been presented at the time the 
proceedings were held. The administrative law judge will grant or deny 
the petition after providing other parties reasonable opportunity to 
comment. If the proceeding is reopened, the administrative law judge 
may make such arrangements as the ALJ deems appropriate for receiving 
the new evidence and completing the record. The administrative law 
judge will then issue a new initial decision and order, and the case 
will proceed to final decision and order in accordance with 
Sec. 280.623 of this part.


Sec. 280.622  Record for decision and availability of documents.

    (a) General. The transcript of hearings, exhibits, rulings, orders, 
all papers and requests filed in the proceedings and, for purposes of 
any appeal under Sec. 280.623 of this part, the decision of the 
administrative law judge and such submissions as are provided for by 
Sec. 280.623 of this part, will constitute the record and the exclusive 
basis for decision. When a case is settled after the service of a 
charging letter, the record will consist of any and all of the 
foregoing, as well as the settlement agreement and the order. When a 
case is settled before service of a charging letter, the record will 
consist of the proposed charging letter, the settlement agreement and 
the order.
    (b) Restricted access. On the administrative law judge's own 
motion, or on the motion of any party, the administrative law judge may 
direct that there be a restricted access portion of the record for any 
material in the record to which public access is restricted by law or 
by the terms of a protective order entered in the proceedings. A party 
seeking to restrict access to any portion of the record is responsible 
for submitting, at the time specified in Sec. 280.622(c)(2) of this 
part, a version of the document proposed for public availability that 
reflects the requested deletion. The restricted access portion of the 
record will be placed in a separate file and the file will be clearly 
marked to avoid improper disclosure and to

[[Page 50579]]

identify it as a portion of the official record in the proceedings. The 
administrative law judge may act at any time to permit material that 
becomes declassified or unrestricted through passage of time to be 
transferred to the unrestricted access portion of the record.
    (c) Availability of documents--(1) Scope. All charging letters, 
answers, initial decisions, and orders disposing of a case will be made 
available for public inspection in the BXA Freedom of Information 
Records Inspection Facility, U.S. Department of Commerce, Room H-6624, 
14th Street and Pennsylvania Avenue, NW, Washington, DC 20230. The 
complete record for decision, as defined in paragraphs (a) and (b) of 
this section will be made available on request.
    (2) Timing. Documents are available immediately upon filing, except 
for any portion of the record for which a request for segregation is 
made. Parties that seek to restrict access to any portion of the record 
under paragraph (b) of this section must make such a request, together 
with the reasons supporting the claim of confidentiality, 
simultaneously with the submission of material for the record.


Sec. 280.623  Appeals.

    (a) Grounds. A party may appeal to the Under Secretary from an 
order disposing of a proceeding or an order denying a petition to set 
aside a default or a petition for reopening, on the grounds:
    (1) That a necessary finding of fact is omitted, erroneous or 
unsupported by substantial evidence of record;
    (2) That a necessary legal conclusion or finding is contrary to 
law;
    (3) That prejudicial procedural error occurred; or
    (4) That the decision or the extent of sanctions is arbitrary, 
capricious or an abuse of discretion. The appeal must specify the 
grounds on which the appeal is based and the provisions of the order 
from which the appeal is taken.
    (b) Filing of appeal. An appeal from an order must be filed with 
the Office of the Under Secretary for Export Administration, Bureau of 
Export Administration, U.S. Department of Commerce, Room H-3898, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230, within 30 
days after service of the order appealed from. If the Under Secretary 
cannot act on an appeal for any reason, the Under Secretary will 
designate another Department of Commerce official to receive and act on 
the appeal.
    (c) Effect of appeal. The filing of an appeal shall not stay the 
operation of any order, unless the order by its express terms so 
provides or unless the Under Secretary, upon application by a party and 
with opportunity for response, grants a stay.
    (d) Appeal procedure. The Under Secretary normally will not hold 
hearings or entertain oral argument on appeals. A full written 
statement in support of the appeal must be filed with the appeal and be 
simultaneously served on all parties, who shall have 30 days from 
service to file a reply. At his/her discretion, the Under Secretary may 
accept new submissions, but will not ordinarily accept those 
submissions filed more than 30 days after the filing of the reply to 
the appellant's first submission.
    (e) Decisions. The decision will be in writing and will be 
accompanied by an order signed by the Under Secretary giving effect to 
the decision. The order may either dispose of the case by affirming, 
modifying or reversing the order of the administrative law judge or may 
refer the case back to the administrative law judge for further 
proceedings.
    (f) Delivery. The final decision and implementing order shall be 
served on the parties and will be publicly available in accordance with 
Sec. 280.622 of this part.
    (g) Judicial Review. The charged party may appeal the Under 
Secretary's written order within 30 days to the appropriate United 
States District Court pursuant to section 9(b)(3) of the Act (15 U.S.C. 
5408(b)(3)) by filing a notice of appeal in such court within 30 days 
from the date of such order and by simultaneously sending a copy of 
such notice by certified mail to the Chief Counsel for Export 
Administration, Room H-3839, U.S. Department of Commerce, 14th Street 
and Constitution Avenue, NW., Washington, DC 20230. The findings and 
order of the Under Secretary shall be set aside by such court if they 
are found to be unsupported by substantial evidence, as provided in 
section 706(2) of title 5 United States Code.

Subpart H--Recordal of Insignia


Sec. 280.700  Recorded insignia required prior to offer for sale.

    (a) Any manufacturer or private label distributor of a fastener 
must, prior to any sale or offer for sale of any fastener which is 
required by the standards and specifications by which it is 
manufactured to bear a raised or depressed insignia identifying its 
manufacturer or private label distributor, apply for and record an 
insignia to be applied to any fastener which is to be sold or offered 
for sale to ensure that each fastener may be traced to its manufacturer 
or private label distributor.
    (b) The manufacturer's or private label distributor's insignia must 
be applied to any fastener which is sold or offered for sale if such 
fastener is required by the standards and specification by which it is 
manufactured to bear a raised or depressed insignia identifying its 
manufacturer or private label distributor. If the fastener has no head, 
the insignia must be applied to another surface area in a legible 
manner.
    (c) The insignia must be applied through a raised or depressed 
impression. The insignia must be readable with no greater than 10x 
magnification.

The Written Application


Sec. 280.710  Applications for insignia.

    (a) Each manufacturer or private label distributor must submit a 
written application for recordal of an insignia on the Fastener 
Insignia Register along with the prescribed fee. The application must 
be in a form prescribed by the Commissioner.
    (b) The written application must be in the English language and 
must include the following:
    (1) The name of the applicant;
    (2) The address of the applicant;
    (3) The entity, domicile, and state of incorporation, if 
applicable, of the applicant;
    (4) either:
    (i) A request for recordal and issuance of a unique alphanumeric 
designation by the Commissioner, or
    (ii) A request for recordal of a trademark, which is the subject of 
either a duly filed application or a registration for fasteners in the 
name of the applicant in the U.S. Patent and Trademark Office on the 
Principal Register, indicating the application serial number or 
registration number and accompanied by a copy of the drawing page of 
the application or a copy of the registration;
    (5) A statement that the applicant will comply with the applicable 
provisions of the Fastener Quality Act;
    (6) A statement that the person signing the application on behalf 
of the applicant has personal knowledge of the facts relevant to the 
application and that the person possesses the authority to act on 
behalf of the applicant;
    (7) A verification stating that the person signing declares under 
penalty of perjury under the laws of the United States of America that 
the information and statements included in the application are true and 
correct; and

[[Page 50580]]

    (8) The application fee.
    (c) An applicant may designate only one registered trademark for 
recordal on the Fastener Insignia Register in a single application. The 
trademark application or registration which forms the basis for the 
fastener recordal must be in active status, that is a pending 
application or a registration which is not expired, abandoned or 
canceled, at the time of the application for recordal.
    (d) Applications and other documents should be addressed to: Box 
Fastener, Commissioner of Patents and Trademarks, Washington DC 20231.


Sec. 280.711  Review of the application.

    The Commissioner will review the application for compliance with 
Sec. 280.710. If the application does not contain one or more of the 
elements required by Sec. 280.710, the Commissioner will not issue a 
certificate of recordal, and will return the papers and fees. The 
Commissioner will notify the applicant of any defect in the 
application. Applications for recordal of an insignia may be re-
submitted to the Commissioner at any time.


Sec. 280.712  Certificate of recordal.

    If the application complies with the requirements of Sec. 280.710, 
the Commissioner shall accept the application and issue a certificate 
of recordal. Such certificate shall be issued in the name of the United 
States of America, under the seal of the Patent and Trademark Office, 
and a record shall be kept in the Patent and Trademark Office. The 
certificate of recordal shall display the recorded insignia of the 
applicant, and state the name, address, legal entity and domicile of 
the applicant, as well as the date of issuance of such certificate.


Sec. 280.713  Recordal of additional insignia.

    (a) A manufacturer or private label distributor to whom the 
Commissioner has issued an alphanumeric designation may apply for 
recordal of its trademark for fasteners if the trademark is the subject 
of a duly filed application or is registered in the U.S. Patent and 
Trademark Office on the Principal Register. Upon recordal, either the 
alphanumeric designation or the registered mark, or both, may be used 
as recorded insignias.
    (b) A manufacturer or private label distributor for whom the 
Commissioner has recorded a trademark as its fastener insignia, may 
apply for issuance and recordal of an alphanumeric designation as a 
fastener insignia. Upon recordal, either the alphanumeric designation 
or the trademark, or both, may be used as recorded insignias.

Post-Recordal Maintenance


Sec. 280.720  Maintenance of the certificate of recordal.

    (a) Certificates of recordal remain in an active status for five 
years and may be maintained in an active status for five-year periods 
running consecutively from the date of issuance of the certificate of 
recordal upon compliance with the requirements of Sec. 280.720(c).
    (b) Maintenance applications shall be required only if the holder 
of the certificate of recordal is a manufacturer or private label 
distributor at the time the maintenance application is required.
    (c) Certificates of recordal will be designated as inactive unless, 
within six months prior to the expiration of each five-year period 
running consecutively from the date of issuance, the certificate holder 
files the prescribed maintenance fee and the maintenance application. 
The maintenance application must be in the English language and must 
include the following:
    (1) The name of the applicant;
    (2) The address of the applicant;
    (3) The entity, domicile, and state of incorporation, if 
applicable, of the applicant;
    (4) A copy of applicant's certificate of recordal;
    (5) A statement that the applicant will comply with the applicable 
provisions of the Fastener Quality Act;
    (6) A statement that the person signing the application on behalf 
of the applicant has knowledge of the facts relevant to the application 
and that the person possesses the authority to act on behalf of the 
applicant;
    (7) A verification stating that the person signing declares under 
penalty of perjury under the laws of the United States of America that 
the information and statements included in the application are true and 
correct; and
    (8) The maintenance application fee.
    (d) Where no maintenance application is timely filed, a certificate 
of recordal will be designated inactive. However, such certificate may 
be designated active if the certificate holder files the prescribed 
maintenance fee and application and the additional surcharge within six 
months following the expiration of the certificate of recordal.
    (e) After the six-month period following the expiration of the 
certificate of recordal, the certificate of recordal shall be deemed 
active only if the certificate holder files a new application for 
recordal with the prescribed fee for obtaining a fastener insignia and 
attaches a copy of the expired certificate of recordal.
    (f) A separate maintenance application and fee must be filed and 
paid for each recorded insignia.


Sec. 280.721  Notification of changes of address.

    The applicant or the holder of a certificate of recordal shall 
notify the Commissioner of any change of address or change of name no 
later than six months after the change. The holder must do so whether 
the certificate of recordal is in an active or inactive status.


Sec. 280.722  Transfer or amendment of the certificate of recordal.

    (a) The certificate of recordal cannot be transferred or assigned.
    (b) The certificate of recordal may be amended only to show a 
change of name or change of address.


Sec. 280.723  Transfer or assignment of the trademark registration or 
recorded insignia.

    (a) A trademark application or registration which forms the basis 
of a fastener recordal may be transferred or assigned. Any transfer or 
assignment of such an application or registration shall be recorded in 
the Patent and Trademark Office within three months of the transfer or 
assignment. A copy of such transfer or assignment must also be sent to: 
Box Fastener, Commissioner of Patents and Trademarks, Washington, DC 
20231.
    (b) Upon transfer or assignment of a trademark application or 
registration which forms the basis of a certificate of recordal, the 
Commissioner shall designate the certificate of recordal as inactive. 
The certificate of recordal shall be deemed inactive as of the 
effective date of the transfer or assignment. Certificates of recordal 
designated inactive due to transfer or assignment of a trademark 
application or registration cannot be reactivated.
    (c) An assigned trademark application or registration may form the 
basis for a new application for recordal of a fastener insignia.
    (d) A fastener insignia consisting of an alphanumeric designation 
issued by the Commissioner can be transferred or assigned.
    (e) Upon transfer or assignment of an alphanumeric designation, the 
Commissioner shall designate such alphanumeric designation as inactive. 
The alphanumeric designation shall be deemed inactive as of the 
effective date of the transfer or assignment. Alphanumeric designations 
which are designated inactive due to transfer or assignment may be 
reactivated upon application by the assignee of such alphanumeric 
designation. Such application must meet all the

[[Page 50581]]

requirements of Sec. 280.710 and must include a copy of the pertinent 
portions of the document assigning rights in the alphanumeric 
designation. Such application must be filed within six months of the 
date of assignment.


Sec. 280.724  Change in status of trademark registration or amendment 
of the trademark.

    (a) The Commissioner shall designate the certificate of recordal as 
inactive, upon:
    (1) Issuance of a final decision on appeal which refuses 
registration of the application which formed the basis for the 
certificate of recordal; or
    (2) Abandonment of the application which formed the basis for the 
certificate of recordal; or
    (3) Cancellation or expiration of the trademark registration which 
formed the basis of the certificate of recordal.
    (b) Any amendment of the mark in a trademark application or 
registration which forms the basis for a certificate of recordal will 
result in such certificate of recordal being designated inactive. The 
certificate of recordal shall become inactive as of the date of the 
amendment of the trademark. A new application for recordal of the 
amended trademark application or registration may be submitted to the 
Commissioner at any time.
    (c) Certificates of recordal designated inactive due to 
cancellation, expiration, abandonment or amendment of the trademark 
application or registration cannot be reactivated.


Sec. 280.725  Cumulative listing of recordal information.

    The Commissioner shall maintain a record of the names, current 
addresses, and legal entities of all recorded manufacturers and private 
label distributors and their recorded insignia.


Sec. 280.726  Records and files of the Patent and Trademark Office.

    The records relating to fastener insignia shall be open to public 
inspection. Copies of any such records may be obtained upon request and 
payment of the fee set by the Commissioner.

[FR Doc. 96-24105 Filed 9-25-96; 8:45 am]
BILLING CODE 3510-13-P