[Federal Register Volume 69, Number 225 (Tuesday, November 23, 2004)]
[Rules and Regulations]
[Pages 68076-68077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25951]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 750

[Docket No. 041001275-4275-01]
RIN 0694-AD05


Revision of Licensee's Responsibility To Communicate License 
Conditions

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim rule.

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SUMMARY: This interim rule revises the Export Administration 
Regulations (EAR) to require licensees to communicate in writing 
specific license conditions to the parties to whom the license 
conditions apply. This rule also makes a technical correction to the 
title of part 750 of the EAR.

DATES: This rule is effective: December 23, 2004.

FOR FURTHER INFORMATION CONTACT: Jeffery Lynch, Regulatory Policy 
Division, Office of Exporter Services, Bureau of Industry and Security; 
e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    In July 2000, BIS published a regulation (65 FR 42565) that 
required the licensee to communicate specific license conditions to 
applicable parties. The Export Administration Regulations (EAR) state, 
in Sec.  750.7(d), that ``it is the licensee's responsibility to 
communicate the specific license conditions to the parties to whom 
those conditions apply. In addition, when required by the license 
condition, the licensee is responsible for obtaining written 
acknowledgment(s) of receipt of the conditions from the party(ies) to 
whom those conditions apply.''
    The purpose of this rule is to ensure that license conditions are 
communicated to the parties to whom they apply, and to clarify the 
manner in which the conditions should be communicated. Such 
communication must be in writing (which includes recorded and 
retrievable media, such as e-mail). This revision is in accordance with 
the Government Accountability Office's (GAO) post-shipment verification 
recommendations to the Bureau of Industry and Security (BIS) (found in 
GAO-04-357). This revision will not increase the burden to the public, 
as license conditions generally are typically communicated in writing, 
(e.g., via e-mail or facsimile).
    The written communication of the text of license conditions (not 
the manner in which the writing is formatted) is the most important 
aspect of this requirement. For example, if a licensee communicates the 
conditions via a sales contract, then the sales contract must 
specifically state that the conditions continue beyond any stated 
validity period of the contract.
    Export licenses may include several different types of conditions, 
including restrictions on end-use, requirements to keep records or 
submit reports, or requirements to return certain items to the United 
States. Some licenses may be subject to several conditions, each of 
which may affect a different party to the export transaction. Pursuant 
to the requirements set forth in this rule, the licensee bears the 
responsibility of ensuring that the terms and text of the conditions 
are clearly conveyed to the appropriate involved parties.
    In addition to the above provisions, this rule also makes a 
technical correction to the title of Part 750 of the EAR. Currently, 
that part is entitled ``Application Processing, Issuance or and 
Denial.'' The ``or and'' in the title is in reverse order. This rule 
changes the title to read ``Application Processing, Issuance and 
Denial.''
    Although the Export Administration Act expired on August 20, 2001, 
Executive Order 13222 of August 17, 2001 (3 CFR, 2001 Comp., p. 783 
(2002)), as extended by the Notice of August 6, 2004, 69 FR 48763 
(August 10, 2004) continues the EAR in effect under the International 
Emergency Economic Powers Act.

Rulemaking Requirements

    1. This interim rule has been determined to be not significant for 
purposes of E.O. 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information, subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid Office of Management and Budget (OMB) Control Number. This rule 
involves a collection of information subject to the PRA. This 
collection has been approved by OMB under control number 0694-0122, 
``Multi-Purpose Application,'' which carries a burden hour estimate of 
10 minutes for a manual or electronic submission. Send comments 
regarding these burden estimates or any other aspect of this collection 
of information, including suggestions for reducing the burden, to David 
Rostker, Office of Management and Budget (OMB), by e-mail to

[[Page 68077]]

[email protected], or by fax to (202) 395-7285; and to the 
Office of Administration, Bureau of Industry and Security, Department 
of Commerce, 14th and Pennsylvania Avenue, NW., Room 6883, Washington, 
DC 20230.
    3. This rule does not contain policies with federalism implications 
as that term is defined under E.O. 13132.
    4. The Department finds under 5 U.S.C. 553(b)(B) that good cause 
exists to waive prior notice and opportunity for public comment. This 
rule revises the EAR to require licensees to communicate in writing 
specific license conditions to the parties to whom they apply. By 
requiring such notice to be in writing, BIS merely clarifies the form 
in which the notice must be provided. The previously existing EAR 
requirement to provide such notice is unchanged by this rule. Because 
this revision is not a substantive change to the EAR, it is unnecessary 
to provide prior notice and opportunity for public comment. Therefore, 
this rule is being issued in interim form.
    Although there is no formal comment period, public comments on this 
regulation are welcome on a continuing basis. Comments should be 
submitted to Jeffrey Lynch, Regulatory Policy Division, Office of 
Exporter Services, Bureau of Industry and Security, P.O. Box 273, 
Washington, DC 20044, e-mailed to: [email protected], or faxed to 
(202) 482-3355.
    The public record concerning this regulation will be maintained in 
the Bureau of Industry and Security Freedom of Information Records 
Inspection Facility, Room 6881, Department of Commerce, 14th Street and 
Pennsylvania Avenue, NW., Washington, DC 20230. Records in this 
facility may be inspected and copied in accordance with regulations 
published in part 4 of Title 15 of the Code of Federal Regulations. 
Information about the inspection and copying of records at the facility 
may be obtained from the Bureau of Industry and Security Freedom of 
Information Officer, at the above address or by calling (202) 482-0500.

List of Subjects for 15 CFR Part 750

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

0
Accordingly, part 750 of the Export Administration Regulations (15 CFR 
parts 730-799) is amended as follows:

PART 750--[AMENDED]

0
1. The authority citation for 15 CFR part 750 is revised to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
Sec 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 13026, 61 FR 58767, 3 
CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., 
p. 783; Presidential Determination 2003-23 of May 7, 2003, 68 FR 
26459, May 16, 2003; Notice of August 6, 2004, 69 FR 48763 (August 
10, 2004).


0
2. Revise the title of part 750 to read as follows: ``PART 750--
APPLICATION PROCESSING, ISSUANCE, AND DENIAL''.


Sec.  750.7  [Amended]

0
3. Revise the sixth sentence in Sec.  750.7(d) to read as follows: ``It 
is the licensee's responsibility to communicate in writing the specific 
license conditions.''

    Dated: November 16, 2004.
Peter Lichtenbaum,
Assistant Secretary for Export Administration.
[FR Doc. 04-25951 Filed 11-22-04; 8:45 am]
BILLING CODE 3510-33-P