[Federal Register Volume 71, Number 31 (Wednesday, February 15, 2006)]
[Rules and Regulations]
[Pages 8064-8161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1067]



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Part II





Department of State





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22 CFR Parts 96, 97, and 98



Hague Convention on Intercountry Adoption; Intercountry Adoption Act of 
2000; Accreditation of Agencies; Approval of Persons and Intercountry 
Adoption[m'dash]Preservation of Convention Records; Final Rules

  Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / 
Rules and Regulations  

[[Page 8064]]


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DEPARTMENT OF STATE

22 CFR Part 96

[Public Notice 5296]
RIN 1400-AA-88


Hague Convention on Intercountry Adoption; Intercountry Adoption 
Act of 2000; Accreditation of Agencies; Approval of Persons

AGENCY: Department of State.

ACTION: Final rule.

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SUMMARY: The Department of State (the Department) is issuing a final 
rule on the accreditation and approval of agencies and persons in 
accordance with the 1993 Hague Convention on Protection of Children and 
Co-operation in Respect of Intercountry Adoption (the Convention) and 
the Intercountry Adoption Act of 2000 (the IAA), after review of public 
comments received in response to the Department's September 15, 2003 
issuance of a proposed rule. The Convention and the IAA generally 
require that agencies and persons be accredited or approved to provide 
adoption services for intercountry adoptions when both countries 
involved are parties to the Convention, and the IAA requires that the 
Department designate one or more qualified accrediting entities to 
accredit and approve agencies and persons. Today's new action 
establishes the accreditation and approval standards for agencies and 
persons that accrediting entities will use; establishes requirements 
applicable to potential accrediting entities; and establishes a 
framework for the Department's oversight of accrediting entities, 
agencies, and persons. This action is a necessary step toward bringing 
the Convention into force for the United States.

DATES: This rule is effective March 17, 2006. Information about the 
date the Convention will enter into force is indicated in the text of 
the final rule.

FOR FURTHER INFORMATION CONTACT: Corrin Ferber at 202-736-9172 or Anna 
Mary Coburn or Lisa Vogel at 202-736-9081. Hearing- or speech-impaired 
persons may use the Telecommunications Devices for the Deaf (TDD) by 
contacting the Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background
II. The Department's Implementation of the Convention and the IAA
    A. Accrediting Entities
    B. Accreditation and Approval Standards
    C. Enforcement
    D. Concerns About Conduct in Convention Countries
III. Overview of Major Changes and Provisions in the Final Rule
    A. Primary Providers and Supervised Providers
    B. Accreditation and Approval Standards
    C. Complaint Registry
IV. Section-by-Section Discussion of Comments
V. Regulatory Review
    A. Regulatory Flexibility Act/Executive Order 13272: Small 
Business
    B. The Small Business Regulatory Enforcement Fairness Act of 
1996
    C. The Unfunded Mandates Reform Act of 1995
    D. Executive Order 13132: Federalism
    E. Executive Order 12866: Regulatory Review
    F. Executive Order 12988: Civil Justice Reform
    G. The Paperwork Reduction Act of 1995
    H. Congressional Review
    I. The Treasury and General Government Appropriations Act of 
1999--Assessment of Federal Regulations and Policies on Families
    Final Rule
    Subpart A--General Provisions
    Subpart B--Selection, Designation, and Duties of Accrediting 
Entities
    Subpart C--Accreditation and Approval Requirements for the 
Provision of Adoption Services
    Subpart D--Application Procedures for Accreditation and Approval
    Subpart E--Evaluation of Applicants for Accreditation and 
Approval
    Subpart F--Standards for Convention Accreditation and Approval
    Subpart G--Decisions on Applications for Accreditation or 
Approval
    Subpart H--Renewal of Accreditation or Approval
    Subpart I--Routine Oversight by Accrediting Entities
    Subpart J--Oversight Through Review of Complaints
    Subpart K--Adverse Action by the Accrediting Entity
    Subpart L--Oversight of Accredited Agencies and Approved Persons 
by the Secretary
    Subpart M--Dissemination and Reporting of Information by 
Accrediting Entities
    Subpart N--Procedures and Standards Relating to Temporary 
Accreditation

I. Background

    The Convention is a multilateral treaty that provides a framework 
of safeguards for protecting children and families involved in 
intercountry adoption. It was developed under the auspices of the 
intergovernmental organization known as the Hague Conference on Private 
International Law (the Hague Conference).
    The United States signed the Convention on March 31, 1994, and the 
President transmitted the Convention to the Senate for its advice and 
consent on June 11, 1998. (S. Treaty Doc. 105-51 at III (1998)). 
Differing versions of implementing legislation for the Convention were 
introduced in both the Senate and the House of Representatives in 1999 
and were subsequently referred to the appropriate committees. The 
Senate Foreign Relations Committee held hearings on October 5, 1999, 
and issued a committee report on S. 682 (Report of the Senate Committee 
on Foreign Relations on the Intercountry Adoption Act of 2000, 106th 
Cong. 2nd Sess., S. Rep. No. 106-276 (2000)). The House International 
Relations Committee held hearings on H.R. 2909 on October 29, 1999, and 
also issued a committee report. (Report of the House Committee on 
International Relations on the Intercountry Adoption Act, 106th Cong. 
2nd Sess., H.R. Rep. No. 106-691 (2000)).
    On September 20, 2000, the Senate gave its advice and consent to 
the ratification of the Convention and, at about the same time, 
Congress enacted the implementing legislation for the Convention, the 
Intercountry Adoption Act of 2000 (the IAA)), Public Law 106-279, 42 
U.S.C. 14901-14952. Consistent with U.S. policy on ratification of 
treaties and the Senate's advice and consent to ratification, the 
United States will not ratify the Convention until the United States is 
able to carry out its obligations under the Convention (See Senate 
Declaration for Convention Article 22(2) (146 Cong. Rec. S8866 (daily 
ed. Sept. 20, 2000)). Thus, although this Final Rule is effective in 30 
days, except as otherwise indicated in the text of the rule, the 
Convention will not enter into force immediately upon passage of the 30 
days.
    The Convention gives party countries a choice about whether to rely 
exclusively on public authorities or to use private bodies to complete 
certain Central Authority functions listed in the Convention. If the 
Convention country chooses to use private bodies, the private bodies 
must be accredited agencies (nonprofit adoption service providers) or 
approved persons (for-profit and individual adoption service 
providers). The Senate's advice and consent to the ratification of the 
Convention, taken together with the IAA, establish that the United 
States will use accredited agencies and approved persons (referred to 
within this preamble as ``adoption service providers'' where 
appropriate) to perform certain U.S. Central Authority functions under 
the Convention. Other Central Authority functions will be performed, as 
appropriate, by the Department or by other governmental authorities 
such as the Department of Homeland Security (DHS).
    The purpose of this final rule is to establish the regulatory 
framework for

[[Page 8065]]

the accreditation and approval function required under the Convention 
and the IAA. In developing the rule, we conducted an extensive 
preliminary public input phase, discussed at http://www.hagueregs.org, 
to garner adoption community input and to engage in a dialogue with 
stakeholders. On September 15, 2003, the Department published in the 
Federal Register a proposed rule on the accreditation and approval of 
agencies and persons (68 FR 54064). For a more detailed discussion of 
the Convention, the IAA, and the Department's basis for the rule, see 
the preamble to the proposed rule. The Department held a further 
meeting on October 28, 2003 to answer questions regarding the proposed 
rule. The initial 60-day deadline for submitting comments was extended 
30 days, to December 15, 2003.
    Since issuing the proposed rule, the Department has also initiated 
a selection process to recruit and identify qualified accrediting 
entities to accredit agencies and approve persons. (The Department 
solicited candidates by mailing Requests for Statements of Interest to 
the adoption licensing and child welfare services authorities of each 
State and to all private nonprofit organizations that had expressed 
interest in providing accreditation/approval services. It also posted 
the information soliciting statements of interest from qualified 
candidates on its Web site.) The Department thoroughly reviewed all 
applications received by the deadline of April 30, 2004. The Department 
met with qualified candidates in March 2005 to begin negotiating 
agreements to designate accrediting entities. (70 FR 11306, March 8, 
2005). The Department will publish all agreements designating 
accrediting entities in the Federal Register, as required by the IAA.
    Also published in today's Federal Register is the final rule for 
part 98 of title 22 of the CFR. It provides the rule for the 
preservation of Convention records by the Department and DHS. Separate 
rules, which are still under preparation, will establish intercountry 
adoption procedures under the Convention and the IAA's amendments to 
the Immigration and Nationality Act (INA).

II. The Department's Implementation of the Convention and the IAA

    Consistent with the IAA and the Convention, this rule creates an 
accreditation/approval system that does not displace State licensing of 
adoption service providers, but that does create new Federal 
requirements for agencies and persons handling adoption cases between 
the United States and other countries party to the Convention. A number 
of commenters expressed a variety of concerns about the Department's 
approach to implementing the Convention and the IAA through an 
accreditation scheme that relies on accrediting entities selected by 
the Department to oversee and monitor adoption service providers. In 
response to those concerns, we want to reiterate the guiding principles 
behind this rule and the Federal accreditation scheme it creates.

A. Accrediting Entities

    Many commenters essentially objected to the use of accrediting 
entities, preferring the Department to assume direct responsibility for 
accreditation of agencies and approval of persons. It would be 
inconsistent with the IAA, however, for the Department to assume such a 
role. The IAA accreditation scheme provides for the Department to 
select and designate one or more accrediting entities to perform this 
function.
    Some commenters sought more robust provisions controlling the 
conduct of accrediting entities. The IAA sections on accrediting 
entities left the Department discretion to negotiate by agreement how 
an accrediting entity will perform its accreditation duties. It would 
be unrealistic and unworkable to address these issues in the rule. We 
therefore have included in the final rule some provisions that will 
govern designated accrediting entities, but much of the conduct of 
accrediting entities will be governed by agreements in addition to 
these regulations. The use of agreements is consistent with the statute 
and provides the flexibility needed to handle relationships with 
multiple accrediting entities, which may differ in ways that require 
different provisions governing their relationships with the Department.

B. Accreditation and Approval Standards

    We received a wide range of public input on what accreditation/
approval standards should be excluded from or added to subpart F of the 
rule (and correspondingly subpart N on temporary accreditation). Our 
responses to comments on specific standards are contained in the 
section-by-section discussion. We respond here, however, to a number of 
general concerns repeatedly expressed by commenters by explaining our 
overall conception of the accreditation standards.
    We used the central purposes of the IAA and the Convention as a 
guide throughout the development of the standards for accreditation and 
approval. These purposes are to protect the rights of, and prevent 
abuses against, participants in the adoption process in Convention 
cases, and to ensure that such adoptions are in the children's best 
interests. In addition, the IAA seeks to improve the ability of the 
Federal Government to assist prospective adoptive parent(s) in 
Convention cases involving the United States.
    The standards in subpart F are based on the Convention and the IAA, 
particularly section 203(b). Where the Convention or the IAA speaks 
broadly, we have also sought to reflect current norms in adoption 
practice, as made known to us during the development of the rule.
    In particular, the standards in subpart F reflect a focus on 
ensuring that agencies and persons provide adoption services with an 
individual child's best interests as the foremost goal. The standards 
also cover key areas of concern to adoptees, birth parents, and 
adoptive parents, such as financial transparency, ethical conduct in 
determining if a child is eligible for adoption and in obtaining 
medical records for a child, and sound social work practices when 
providing training and information to prospective adoptive parent(s). 
In reviewing the overall impact of the rule on agencies and persons in 
light of comments suggesting that the standards be loosened, we 
retained standards we consider necessary for implementing the 
Convention's and the IAA's goals of protecting participants in 
Convention adoptions.
    Some commenters wanted the standards in subpart F to be cast as 
specific licensing criteria that must be met in all cases rather than 
as accreditation standards that must be ``substantially'' complied 
with. As explained in our response to comments on Sec.  96.27 of 
subpart E, the Department believes that an accreditation model based on 
substantial compliance is more consistent with the regulatory approach 
the IAA contemplates. The performance-based standards created by 
subpart F (and subpart N) are the type of flexible standards common to 
the accreditation field generally, and thus are appropriate for 
implementing the IAA. The process of accreditation gives an accrediting 
entity discretion to identify problems in an agency's or person's 
operations and to provide an opportunity for correction.

C. Enforcement

    A number of commenters sought to have the Department play a primary 
role in enforcing substantial compliance by agencies and persons with 
the

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accreditation standards. This view is inconsistent with the IAA, 
however, which dictates that the primary responsibility for oversight 
of agencies and persons lies with the accrediting entities. The 
accrediting entities will have discretion to determine which adverse 
action is appropriate in light of the particular standards in subpart F 
(or N) with which the agency or person is not in compliance. The 
Department may be required to intervene if the accrediting entity, 
after consultation with the Department, fails, or refuses, to take 
adverse action against an agency or person. The types of adverse 
actions and who can take them (accrediting entities or the Department) 
under what circumstances are covered in subparts K and L of the rule.
    The Department was asked to permit ``penalties'' for failure to be 
in substantial compliance with the rule, other than the enforcement 
mechanisms called adverse actions created by the IAA, and to tie the 
violation of particular standards to particular penalties. We have not 
made such changes. The rule provides the full range of ``penalty'' 
options provided in the IAA for disciplining agencies and persons. 
Because the IAA mandates a substantial compliance model of 
accreditation, the rule does not require that accrediting entities 
impose particular penalties for violation of particular standards.
    Other commenters raised a number of concerns related to the notice 
that an agency or person would receive of an adverse action, and the 
options that an agency or person would have for protesting the 
imposition of the adverse action. While the IAA limits review 
procedures that are available, the Department has made a number of 
clarifications in the final rule to address these concerns. (See the 
section-by-section discussion of subparts K and L.) The rule now 
clearly provides that an accredited agency or approved person will have 
either notice that it may be faced with an adverse action and an 
opportunity to show it is not warranted or, if notice is not provided, 
an equivalent after-the-fact opportunity to show that the action should 
be withdrawn. The rule also clarifies that the accrediting entity that 
imposed an adverse action can always withdraw the adverse action, if it 
determines that the action was imposed based upon mistake of fact or 
otherwise in error.

D. Concerns About Conduct in Convention Countries

    We received many comments requesting that the Department address 
specific problems in countries of origin. As Central Authority, the 
Department may be able to influence another Convention country's 
practices via diplomatic efforts and the provision of technical 
assistance. It is outside the scope of our authority, however, and 
inconsistent with the Convention's allocation of responsibilities 
between a country of origin and a receiving country, for us to impose 
specific rules on Convention countries. Therefore, we have not changed 
the final rule to cover conduct by other Central Authorities or their 
competent (public) authorities. As described in section III, subsection 
A, below, however, we have changed the standards U.S. agencies and 
persons will need to meet in using private providers in Convention 
countries. The standards, as changed, tie the accreditation of agencies 
and approval of persons to whether they have adequate arrangements in 
place to ensure that, when acting as a primary provider, they can 
provide ``all adoption services in cases subject to the Convention'' in 
a manner consistent with the IAA and the Convention. (See IAA section 
203(b)(1)(B)). They are not intended to interfere with the allocation 
of responsibilities between countries party to the Convention.

III. Overview of Major Changes and Provisions in the Final Rule

    Discussed here are changes and provisions in the final rule that we 
believe are of particular interest to the public. A more thorough 
response to individual comments, and more complete discussion of 
significant changes made to the rule in response to comments, appears 
below in the section-by-section analysis. In addition to changes made 
in direct response to comments received by the Department, we have also 
made a number of changes for technical and policy reasons, the more 
significant of which are brought to the public's attention in the 
section-by-section analysis. We have made an effort to highlight such 
changes in the general discussion at the beginning of each subpart, 
with a brief explanation of why the Department considered them 
necessary. Changes of a purely technical nature (for example, changes 
made to conform to changes in other sections, for grammatical reasons, 
or to ensure consistency throughout the regulations) are not 
exhaustively identified because we believe they are self-explanatory.

A. Primary Providers and Supervised Providers

    Many commenters were concerned about the rule's coverage of 
supervised providers, both in the United States and overseas. Many 
urged that the U.S. accredited/approved primary provider be made 
responsible for any foreign providers that it selects and uses in the 
country of origin, whether public, accredited by the foreign country, 
or private and unaccredited.
    In response to these concerns, we modified Sec. 96.14 of subpart C 
to increase the supervisory responsibilities of primary providers in 
the accreditation context. As discussed below at section III, 
subsection B.4, however, we removed provisions from subpart F that 
would have required a primary provider to assume the legal 
responsibility for tort, contract, and other civil claims against 
supervised providers and to carry liability insurance for its 
supervised providers. The final rule is not intended to have any effect 
on the allocation of legal responsibility for tort, contract and other 
civil claims. We also added concrete examples at Sec. 96.15 of subpart 
C to help explain, generally, the circumstances that require an 
adoption service provider to be accredited, temporarily accredited, 
approved, supervised, or exempted.
    The IAA in section 201(a) provides that, if an agency or person is 
providing adoption services ``in connection with a Convention adoption 
in the United States,'' it must be accredited, approved, or under the 
supervision of an accredited agency or approved person (with limited 
exceptions set forth in section 201(b)). The proposed rule established 
the general principle of a primary provider--that is, one accredited 
agency or approved person responsible for ensuring the provision of all 
adoption services in the Convention adoption case.
    Under the proposed rule, a primary provider could work with 
accredited agencies or approved persons in the United States, or 
overseas with entities accredited by a Convention country or public 
authorities of a Convention country, without supervising or being 
responsible for their acts. The primary provider also was not 
responsible for supervising exempted providers or public domestic 
authorities in the United States. The primary provider was responsible 
only for supervising the acts of private agencies, persons, or other 
entities that were providing adoption services without any Convention 
accreditation or approval status.
    We have kept the requirement in the final rule that the primary 
provider is responsible for all supervised providers on a case, but we 
have broadened the kinds of private entities that the primary provider 
must supervise. There are some differences in the standards that govern 
the primary provider's use of

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other providers in the United States and in Convention countries. These 
differences reflect both the structure of the IAA and the Convention's 
allocation of responsibilities between Convention countries. The common 
objective of these standards, however, is to implement the goals of the 
Convention and the IAA of protecting participants in the adoption 
process and ensuring adoptions are conducted in the best interests of 
the child.
1. U.S. Supervised Providers
    The rule now requires that the primary provider ensure that other 
U.S. accredited agencies or approved persons providing adoption 
services in a case are complying with the standards applicable to U.S. 
supervised providers. That is, Sec.  96.14(b) now requires that a 
primary provider treat all other agencies and persons it is using to 
provide adoption services in the United States on a case as supervised 
providers, regardless of their accreditation/approval status, unless 
the provider qualifies as an exempted provider or a domestic public 
authority.
    We made this change to the proposed rule in response to expressed 
concerns about how an accrediting entity could evaluate the performance 
of an agency or person if, as primary provider, the agency or person 
was not required to supervise any accredited agencies or approved 
persons that it was using to provide adoption services in a particular 
case. If an accrediting entity finds that a primary provider has 
provided inadequate supervision and, as a result, the actions of an 
agency or person that the primary provider is using to provide 
services--whether accredited or approved or not--reveal non-compliance 
with the standards in these regulations applicable to the use of 
supervised providers, then the accrediting entity may take adverse 
action against the primary provider.
2. Foreign Providers
    Under the final rule, the primary provider must now treat all non-
governmental foreign providers, including agencies, persons, or 
entities accredited by a Convention country, that it uses to provide 
adoption services as supervised providers consistent with Sec. 96.46(a) 
and (b), unless the foreign provider performs a service qualifying for 
verification under Sec. 96.46(c) (consents, child background studies 
and home studies). We believe that this approach accommodates our 
concerns, expressed in the preamble to the proposed rule, that primary 
providers would have practical difficulty supervising entities in 
another Convention country. This approach was chosen to ensure that 
primary providers do not inappropriately rely on accreditation by a 
foreign Central Authority as a guarantee of conduct. It is consistent 
with the fact, recognized in this rule and the IAA, that accreditation 
and approval within the U.S. system cannot guarantee good conduct.
    The verification requirement in Sec. 96.46(c) recognizes, however, 
that as a practical matter, a primary provider will not be able to 
supervise contemporaneously all adoption services that might occur in a 
Convention country. A limited number of adoption services will 
generally have been performed in a Convention country before a U.S. 
primary provider has been identified: In an incoming case (child 
immigrating to the United States) the consents to adoption and child 
background study will often have been prepared before intercountry 
adoption to the United States is specifically contemplated; in an 
outgoing case (child emigrating from the United States) the home study 
will often have been prepared before the prospective adoptive parent(s) 
determine that they wish to pursue intercountry adoption from the 
United States.
    To recognize these possibilities and to avoid requiring that such 
services are re-performed under supervision--that is, to avoid creating 
additional costs and delaying adoption placements, which could, in 
turn, disadvantage U.S. prospective adoptive parent(s) seeking to adopt 
abroad and children seeking placements--the rule adopts a different 
approach to the primary provider's oversight of these services. The 
standard set forth in Sec.  96.46(c) requires the primary provider to 
verify that these three adoption services, when provided by private, 
non-governmental providers, were performed in the Convention country 
consistently with the requirements of the Convention and any other 
applicable local law. (In many countries all three of these services 
will be performed by public or competent authorities, for whom a 
primary provider is not required to be responsible.) The verification 
standard of Sec.  96.46(c) will reinforce the protections in the 
Convention and U.S. law relevant to the performance of these three 
adoption services. (The Convention requires, for example, that all home 
and child background studies not prepared by a governmental authority 
be prepared under the responsibility of an accredited body, and that 
competent authorities of the state of origin ensure that consents meet 
Convention requirements. U.S. governmental authorities will also 
address the issue of consent in determining visa eligibility.)
    A primary provider will always have the option of treating 
providers of services that qualify for verification under the Sec.  
96.46(c) standard as supervised providers under Sec.  96.46(a) and (b) 
instead, assuming that substantial compliance with those standards is 
feasible. This might occur, for example, if a primary provider has a 
long-standing supervisory relationship with a particular Convention 
country adoption service provider.
    As was the case in the proposed rule, primary providers are not 
required to treat Central Authorities, or other foreign public 
authorities, as foreign supervised providers. This is consistent with 
the scope of the Department's authority, and the Convention's 
allocation of responsibilities.

B. Accreditation and Approval Standards

    We received many comments on the proposed standards on insurance, 
social service personnel qualifications, blanket waivers of liability, 
and the primary provider's liability for its supervised providers. We 
want to explain revisions we have made to those standards in the final 
rule.
1. Standard on Professional Liability Insurance
    The IAA requires that the standards include an insurance standard. 
The proposed rule provided that an agency or person maintains insurance 
in a minimum amount of no less than $1,000,000 per occurrence, 
annually. In the preamble to the proposed rule, we solicited comments 
on the insurance provision from insurance experts, actuaries, 
associations, and agencies and persons, and explicitly encouraged 
agencies and persons to have their insurance providers comment on this 
provision. We received a number of conflicting comments on the 
insurance provision, with some commenters opposing the inclusion of any 
standard, others stating that professional liability insurance is 
simply unavailable, and others maintaining that, even if professional 
liability insurance were available, the premiums would make it too 
costly for them to operate. Other commenters said insurance would be 
affordable and available.
    In light of the conflicting public comment on this issue, the 
Department made good faith efforts to research further the issues of 
availability, feasibility, and costs of professional liability 
insurance for adoption service providers. The Department hired an 
insurance expert who contacted

[[Page 8068]]

adoption service providers, insurance brokers and agents, wholesalers, 
insurance industry service organizations and insurers. The report of 
the insurance expert (redacted of confidential business information), 
which helped inform the basis of the insurance requirement in the final 
rule, is now part of the public record and can be found at http://www.travel.state.gov/family/adoption.
    The Department has determined that it is appropriate in 
Sec. 96.33(h) of the rule to set a standard of a minimum level of 
professional liability coverage in the amount of $1 million in the 
aggregate, rather than per occurrence. This standard means that an 
adoption service provider should have, at a minimum, a policy that 
would make available $1 million in coverage annually for all covered 
claims. We believe that this standard is sufficient to protect adoption 
service providers, children, and parents, and that the insurance market 
is likely to respond to this regulation by making such coverage 
available to adoption service providers. The rule continues to provide 
that this is a minimum standard; the agency or person will have to take 
into account whether its individual risk profile warrants additional 
professional liability coverage, or other types of insurance.
2. Social Service Personnel Qualifications
    The proposed rule provided as a standard that supervisory social 
service personnel have a master's degree in social work (MSW) or 
master's degree in a related human service field (with some exceptions 
for those already working in the field). Non-supervisory social service 
personnel would have to hold an MSW or master's degree, or a bachelor's 
degree in addition to experience. The proposed rule also provided for 
individuals performing home studies or child background studies to have 
a minimum of an MSW or master's degree in a related human service 
field.
    Most of the comments that we received strongly opposed any standard 
providing for social service personnel, other than those in supervisory 
positions, to have an MSW or master's degree. A number of comments 
indicated that finding qualified MSWs for low-paying positions 
available within nonprofit adoption agencies was next to impossible. 
Agencies and persons in rural, isolated areas expressed concern about 
the general lack of MSWs in non-urban locations. Commenters also 
indicated that experience with adoption practice typically was a better 
prerequisite for handling intercountry adoption cases than holding an 
MSW.
    In response to these comments we revised the standard in the final 
rule. The final rule, at Sec. 96.37, retains the qualifications for 
supervisory social service personnel in the proposed rule. 
Qualifications for non-supervisory social service personnel have been 
slightly modified to provide for an MSW, master's, or a bachelor's 
degree in any field and prior experience in family and children's 
services and adoption. We have eliminated entirely any provision that 
home study preparers or child background study preparers have an MSW or 
a master's degree in a related human service field.
3. Waivers of Liability
    The proposed rule would have set a standard prohibiting adoption 
service providers from asking clients to sign blanket waivers of 
liability. Prospective adoptive parent(s) expressed concerns about 
being asked to sign broad waivers of liability as part of their 
contracts with agencies and persons. On the other hand, we were also 
told that waivers are common to the adoption field, particularly in the 
face of increasing litigation over the tort of wrongful adoption, and 
were given copies of sample waivers. Some commenters insisted that 
agencies and persons could not obtain affordable liability insurance 
unless their contracts with clients identified risks inherent to the 
adoption process and asked clients to assume those enumerated risks. 
Other commenters suggested that the Department provide a boilerplate 
waiver clause.
    We concluded that a standard prohibiting blanket waivers is not 
warranted, and have revised the standard in Sec.  96.39(d) to permit an 
agency or person to include a waiver of liability, if consistent with 
applicable State law. This approach defers to the adoption service 
provider's own assessment of risks and benefits in asking a client to 
sign a waiver, and to State law, rather than imposing a Federal 
standard prohibiting waivers. To address the major concerns about 
extremely broad waivers that exempt all conduct, Sec.  96.39 provides 
that any such waivers comply with State law and additionally be limited 
and specific and based on risks that have been discussed and explained 
to the client in the adoption services contract.
4. Primary Provider Liability for Acts of Supervised Providers
    The proposed rule included standards in Sec.  96.45(c) (Using 
supervised providers in the United States) and Sec.  96.46(c) (Using 
providers in Convention countries) that would have provided for the 
primary provider to assume tort, contract, and other civil liability to 
the prospective adoptive parent(s) for the supervised provider's 
provision of the contracted adoption services and for maintenance of a 
bond, escrow account, or liability insurance to cover liability risks 
arising from the use of supervised providers.
    Many commenters strongly opposed these provisions as impractical 
and unworkable, and some questioned the statutory basis behind them. In 
their view, a court should be allowed to allocate responsibility in any 
particular circumstance, and the Department should not attempt to 
allocate responsibility in the standard. Other commenters questioned 
the availability of the kind of insurance contemplated to cover the 
risk of using supervised providers, especially overseas. A number of 
commenters, including insurance providers and agents, said that 
insurance coverage for supervised providers would push the cost of 
adoption services beyond the reach of many potential prospective 
adoptive parents, while others said that such insurance would be 
affordable.
    The final rule does not include these provisions, or related 
provisions on indemnification that were proposed at Sec. Sec.  96.45(d) 
and 96.46(d). Primary providers may choose how to allocate risk with 
their contractual partners--that is, their supervised providers--within 
the framework of existing laws on liability. Under this rule, however, 
primary providers will still be held responsible for their supervision 
of supervised providers in the accrediting entity's assessment of 
whether they are providing adoption services in substantial compliance 
with this rule, the IAA, and the Convention.

C. Complaint Registry

    The provisions of the final rule related to the Complaint Registry 
differ from those that appeared in the proposed rule. The Department 
still intends to establish a Complaint Registry to support the 
accrediting entities in fulfilling their oversight responsibilities and 
the Department in its own oversight role. The Department at this time 
no longer intends, however, that the Complaint Registry will be an 
independent entity with which the Department will have an agreement. As 
reflected in subpart J on oversight through review of complaints, the 
Complaint Registry will be a system established by the Department to 
assist the accrediting entities and the

[[Page 8069]]

Department in their oversight functions. The Department's current 
operational plan is for the Complaint Registry to collect complaints 
and make them available to the appropriate accrediting entity for 
action. Accrediting entities will be required to establish written 
procedures for recording, investigating, and taking action on 
complaints referred to them through the Complaint Registry. Upon 
completion of an investigation, accrediting entities will have to 
provide written notification to the complainant and the Complaint 
Registry of its findings and any actions taken.
    The Department will be able to review complaints and actions taken 
by the accrediting entity and take independent action if appropriate. 
The Complaint Registry will maintain records of complaints, track 
compliance with deadlines, generate reports, and perform other 
functions as the Secretary determines appropriate. We believe that 
subpart J provides adequate flexibility to assign additional functions 
to the Complaint Registry if experience with the system indicates that 
additional functions would be useful or necessary.

IV. Section-by-Section Discussion of Comments

    This section provides a detailed discussion of comments received on 
the proposed rule, and describes changes made to the proposed rule. Two 
general points should be kept in mind in reading this discussion. 
First, we refer generally to actions of the ``Department'' pursuant to 
the rule. The rule itself refers to actions of the ``Secretary,'' as 
the official named in the IAA, but the day-to-day exercise of the 
Secretary's functions has been delegated and will be exercised by other 
Department officials, primarily in the Bureau of Consular Affairs. (See 
Sec.  96.2 of the rule, defining ``Secretary.'') Second, particularly 
while discussing the accreditation/approval standards of Subpart F, we 
frequently talk in terms of actions that agencies or persons ``must'' 
take and ``requirements'' they must meet. Readers should keep in mind, 
however, that the accreditation/approval model looks for ``substantial 
compliance'' with the standards. Thus, within the substantial 
compliance framework for accreditation that the IAA establishes, 
statements that actions are required mean that agencies or persons will 
have to take such actions in order to be judged in full compliance with 
the standard in question. The accrediting entities will be responsible 
for developing methods of assessing and weighting compliance with 
individual standards, subject to the Department's approval, to 
determine whether accreditation, temporary accreditation, or approval 
can be granted and maintained.

Subpart A--General Provisions

    Subpart A is organized in the same way as in the proposed rule, and 
includes Sec.  96.1 (Purpose); Sec.  96.2 (Definitions); and Sec. 96.3 
(Reserved).
    The Department has made a number of changes to Sec. 96.2 
(Definitions), in response to public comment, which are described 
below. In addition, we have revised the definition of ``approved home 
study'' to clarify that a supervised provider could also complete a 
home study. We have changed the term ``public body'' to ``public 
domestic authority'' and the term ``public authority'' to ``public 
foreign authority,'' without making a substantive change in the 
definitions, to make the distinction between the two terms, which is 
primarily geographic, more transparent. We also added language to the 
definition of ``supervised provider'' to clarify that the definition 
applies regardless of the local terminology used to refer to private 
providers, so long as the private individual or organization is 
providing adoption services under the supervision and responsibility of 
a primary provider, and to the definition of ``exempted provider'' to 
clarify that such providers are providing services within the United 
States.

Section 96.2--Definitions

    1. Comment: One commenter recommends that the Department add a 
definition for ``accreditation'' to clarify that the regulations 
address accreditation only as it relates to Convention adoptions. The 
commenter requests that the Department specifically state that the 
regulations do not affect any voluntary accreditation process for non-
Convention intercountry adoptions.
    Response: These regulations do not affect any voluntary 
accreditation process for non-Convention intercountry adoptions. It is 
not necessary to add a definition of ``accreditation'' to Sec. 96.2, 
however, because Sec.  96.12 makes clear that agencies and persons need 
to be accredited or approved under these regulations only for purposes 
of Convention adoptions.
    2. Comment: One commenter requests that the Department establish a 
definition of ``adoptability'' for U.S. adoptees who are placed 
internationally.
    Response: Each U.S. State determines the criteria to use to 
determine if a child is eligible for adoption in that State. Because 
these regulations are not intended to preempt State law on eligibility 
for adoption, we have not added a definition of ``adoptability.''
    3. Comment: One commenter requests clarification as to whether the 
IAA definition of ``adoption'' is intended to create a Federal law 
definition of adoption. The commenter suggests that the Department 
define an ``adoption,'' for the purposes of the regulations, as the 
judicial or administrative procedure that establishes a legal parent-
child relationship for all purposes between a minor and an adult who is 
not already the minor's legal parent and that satisfies the 
requirements for the minor child's (i) immigration to the United States 
or (ii) emigration from the United States pursuant to the IAA and other 
relevant provisions of the INA and Federal law.
    Response: The definition of adoption in the rule is applicable only 
under these regulations, in the context of the Convention and the IAA. 
The Department does not have authority under the IAA to create a 
Federal definition of adoption to be used outside of the context of the 
Convention and the IAA. Overall, the definition of adoption, for these 
regulations, is designed to provide guidance to agencies and persons on 
what constitutes an adoption for Convention purposes so that they can 
determine if they must be accredited or approved to provide adoption 
services in a particular case. The definition is also useful in 
distinguishing between ``post-placement'' and ``post-adoption.'' In 
response to this comment, the Department is not creating a definition 
of adoption that will have any broader applicability but it is 
replacing the term ``formal act'' with the phrase, ``the judicial or 
administrative act'' in the definition of adoption. This change 
clarifies that the definition defers to State and Convention country 
choice of judicial or administrative procedures for adoption. The 
definition still requires that the legal relationship between a child 
and his or her former parents be terminated, but is not meant to affect 
informal relationships between a child and his or her former parents, 
such as those that develop from an open adoption, or any State law that 
allows a stepparent to adopt a child without terminating the parental 
rights of the stepparent's spouse, or any State law that grants an 
adopted child inheritance rights from a former parent even after a 
legal adoption.
    4. Comment: Many commenters request that the Department clarify the 
difference between ``post-placement monitoring'' and ``post-adoption 
services.'' Another commenter requests

[[Page 8070]]

that the Department explicitly state that ``post-placement services'' 
are services provided by exempted providers in connection with a 
Convention adoption. One commenter asks the Department to clarify 
whether providing assistance with U.S. immigrant visa processing is a 
post-adoption service or post-placement monitoring. There were 
conflicting comments as to whether or not ``post-adoption services'' 
include the provision of supportive services to adoptive families to 
promote the well-being of adoptees and families, the stability of 
adoptive placements, and the prevention of adoption disruption or 
dissolution as well as monitoring and reporting.
    Response: Post-placement monitoring is an ``adoption service'' 
under the IAA. Because of this an adoption service provider must be 
accredited, temporarily accredited, approved, or operate as a 
supervised provider to provide post-placement monitoring in a 
Convention adoption case in the United States. Post-adoption services, 
however, are not adoption services under the IAA, and an agency or 
person would not have to comply with the accreditation/approval 
requirements to perform them in a Convention adoption case. To 
distinguish between post-placement monitoring and post-adoption 
services, the Department has added new definitions of ``post-
placement'' and ``post-adoption.'' ``Post-placement'' is defined as the 
period of time after a grant of legal custody or guardianship of the 
child to the prospective adoptive parent(s) or to a custodian for the 
purpose of escorting the child to the identified prospective adoptive 
parent(s), and before an adoption. An example of ``post-placement 
monitoring'' (an adoption service) would be a pre-adoption home visit 
or report monitoring the child's adjustment to the new pre-adoptive 
home. By contrast, ``post-adoption'' means after an adoption; in cases 
in which an adoption occurs in a Convention country and is followed by 
a re-adoption in the United States, it means after the adoption in the 
Convention country. Any of the following would be examples of a ``post-
adoption service,'' if provided after the child's adoption: providing 
mental and physical health services for the adopted child; providing 
assistance in filling out post-adoption reports required by certain 
Convention countries; and sponsoring support groups for adopted 
children or adoptive parents. The Department understands that there is 
also some confusion over which post-placement services are ``adoption 
services.'' ``Post-placement monitoring'' is one of the enumerated 
``adoption services'' in the IAA. Post-placement monitoring encompasses 
services related to evaluating the continuing fitness of the child's 
adoptive placement. For example, monitoring how a child is adjusting to 
his or her new family or visiting the prospective adoptive parent(s) to 
ensure that they are able to care for the particular needs of the child 
and to determine whether the placement is still in the child's best 
interests is post-placement monitoring.
    If, on the other hand, the post-placement service is not related to 
the adoptive placement, then it is not the adoption service of ``post-
placement monitoring.'' An agency or person is not performing a post-
placement ``adoption service,'' for example, if it provides post-
placement counseling to a family. Assisting with U.S. immigrant visa 
processing is not included in Section 3(3) of the IAA's definition of 
``adoption services,'' and is not an activity that is within the scope 
of these regulations.
    5. Comment: Some commenters request that the Department add ``post-
adoption services'' to the list of adoption services, and hence to the 
activities subject to these regulations. One commenter states that its 
members believe post-placement services, whether provided before or 
after legalization of an adoption, should be provided by qualified 
personnel. The commenter suggests a revision of the Department's 
definition of ``adoption services'' to include providing required 
periodic reports to the child's country of origin, or any other post-
adoption services required by the child's country of origin.
    Response: Section 3(3) of the IAA, which defines adoption services, 
does not include post-adoption services as an adoption service. (In 
fact, while at least one draft of H.R. 2909, the bill that became the 
IAA, included post-adoption services in the definition of adoption 
services, post-adoption services were not included in the definition in 
the IAA as enacted.) Services provided after an adoption is dissolved 
are also not ``adoption services,'' as defined in the IAA, because they 
are provided after an adoption has occurred, so they are post-adoption 
services.
    Some of the comments on this issue reflected a concern about 
ensuring compliance with post-adoption reporting requirements imposed 
by countries of origin, particularly if parents are unwilling to 
cooperate, or do not maintain contact with agencies and persons. The 
Department encourages agencies and persons involved in Convention 
adoptions to comply with all applicable post-adoption reporting 
requirements. We note that countries of origin that require post-
adoption reports may stop working with U.S. agencies and persons that 
cannot produce the post-adoption reports. While this is a potentially 
serious issue, it is not one that can be addressed through the 
accreditation process or these regulations.
    6. Comment: Several commenters request more specific definitions 
addressing who can provide adoption services. They want to know if 
``adoption helpers'' or ``advisors'' are covered. Another commenter 
requests that the Department's definition of ``adoption services'' be 
revised to exclude simply assisting a country of origin's public 
foreign authority. Another commenter requests that the Department 
define ``adoption services'' to include the services of ``unlicensed 
facilitators''--individuals that essentially provide adoption services 
(like the preparation of adoption paperwork and the arrangement of 
child-matching services for parents in foreign countries).
    Response: Whether the activities of an adoption service provider 
are subject to the accreditation/approval standards in this rule turns 
solely on whether the private individual or entity is providing a 
defined ``adoption service,'' and not on the identity of the private 
individual or entity, the term used to refer to the private individual 
or entity, or the entity on whose behalf the services are provided. If 
people who call themselves ``adoption helpers'' or ``advisors'' are 
performing in the United States any of the services enumerated in the 
adoption services definition, they must be accredited, temporarily 
accredited, approved or supervised, or exempted once the Convention 
goes into force for the United States. A primary provider must also 
ensure that, with respect to adoption services performed in a 
Convention country, any private individuals or entities it is using to 
perform adoption services in a Convention case--regardless of identity, 
the term used to refer to them, or on whose behalf the services are 
performed--are supervised, unless they are performing a service 
qualifying for verification under Sec.  96.46(c). Examples of different 
adoption services, and instances in which providers of such services 
must be accredited, temporarily accredited, approved, supervised, or 
exempted, have been added to the regulation to help clarify this point 
in Sec.  96.15 of subpart C.
    7. Comment: One commenter requests that the Department clearly 
define ``suspension'' and ``cancellation'' as they relate to adverse 
actions against

[[Page 8071]]

accredited agencies and approved persons. Specifically, the commenter 
asks whether an accredited agency or approved person will have to 
transfer its adoption cases to another entity during a period of 
``suspension.'' The commenter requests that the Department replace the 
term ``suspension'' with ``probation, with required corrective action'' 
to clarify that the accredited agency or approved person does not have 
to transfer its cases while correcting noted problems.
    Response: The Department has not substituted ``probation, with 
required corrective action'' for ``suspension'' because suspension is 
the term used in the list of adverse actions contained in Sec.  
202(b)(3) of the IAA. Nor have we added definitions of suspension and 
cancellation to subpart A, because the consequences of suspension and 
cancellation are adequately explained in subpart K. Section 96.77 of 
subpart K provides that the suspended agency or person must consult 
with the accrediting entity about whether or not a particular 
suspension requires that an agency or person to transfer all its 
Convention cases. Please see response to comment 1 on Sec. 96.75 for 
further information.
    8. Comment: Several commenters request that the Department 
elaborate on the definition of ``child welfare services.'' They note 
that providers of these services are exempt from the accreditation/
approval process. One commenter requests that the Department provide 
more specific examples of providing child welfare services. Another 
commenter asks whether the definition is limited only to services 
provided by public child welfare agencies or whether it also includes 
broader services such as after-school activities, YMCA programs, or 
summer respite.
    Response: ``Child welfare services'' are defined in Sec.  96.2 as 
services, ``other than those defined as ``adoption services,'' which 
are designed to ``promote and protect the well-being of a family or 
child.'' Thus, when attempting to decide what constitutes a ``child 
welfare service,'' it is necessary first to determine if the service is 
an ``adoption service.'' If not, then the service could be a ``child 
welfare service.'' Some examples of child welfare services are: 
providing mental or physical health services for adoptive parents or 
adoptees; promoting adoption through general programs, but not 
providing adoption services in specific cases; conducting support 
groups for adoptive parents or adoptees; and providing temporary foster 
care for children who are awaiting adoption. These examples are not an 
exhaustive list of ``child welfare services.'' The definition of 
``child welfare services'' is not limited to public child welfare 
agencies. Private organizations, such as the YMCA, are exempt from the 
accreditation/approval process if they only provide services for 
children or parents that are not adoption services.
    9. Comment: One commenter seeks clarity for the definition of 
``exempted provider.''
    Response: ``Exempted providers'' and ``exempted activities'' are 
explained in more detail in the subpart C of this final rule. We have 
changed the definition of ``exempted provider'' to clarify that a 
social work professional or an organization may perform a home study or 
a child background study (or both) in the United States in a Convention 
adoption, as an exempted provider, as long as the social work 
professional or organization is not currently providing and has not 
previously provided any other adoption service in the same case. The 
definition is consistent with Sec.  96.13 of subpart C. See responses 
to comments 1 and 2 in Sec.  96.13.
    10. Comment: Several commenters recommend that the regulations 
define what constitutes a complaint, so that the number of frivolous 
complaints will be limited. Several commenters also recommend that the 
word ``complaint'' be changed to the word ``grievance,'' in order to 
signify a more formal concern, and offer definitions of grievance. 
Several commenters also recommend that the regulations require 
complaints to be filed in writing. One commenter further requests that 
the regulations be amended to reflect that anonymous complaints may not 
be filed.
    Response: We have not added a definition of complaint, but have 
made other changes to the final rule to respond to the concerns 
expressed, in the definition of ``Complaint Registry,'' in Sec.  96.41, 
and in subpart J. Section 96.41 now makes clear that complaints must be 
signed and dated to be lodged with an agency or person, and must refer 
to activities or services that the complainant believes raise an issue 
of compliance with the Convention, the IAA, or the regulations 
implementing the IAA. Subpart J similarly now makes clear that 
complaints that may be filed through the Complaint Registry are written 
documents submitted by a complainant that concern an accredited agency 
or approved persons (including their use of supervised providers), and 
that raise an issue of compliance with the Convention, the IAA, or the 
regulations implementing the IAA. An agency or person's response to 
other kinds of ``complaints'' will not be relevant to the 
accreditation/approval process.
    11. Comment: Some commenters question how the Complaint Registry 
will be established.
    Response: The Department has modified the definition of ``Complaint 
Registry'' (Sec.  96.2) to make it clear that it will be a system 
created by the Department intended to receive, distribute, and monitor 
complaints relevant to the accreditation or approval status of agencies 
and persons. The functions of the Complaint Registry are addressed in 
Sec.  96.70 of subpart J.
    12. Comment: Commenters suggest that the Department add a 
definition of the term ``displacement'' to Sec.  96.2, defining 
displacement as the placement of an adoptee in an out-of-home care 
environment without terminating parental rights, for example, so that 
the child may receive, for example, mental health in-patient treatment.
    Response: Because what the commenters describe as ``displacement'' 
would occur post-adoption, and thus would fall outside the scope of 
these regulations, we have not added a definition of displacement to 
the rule.
    13. Comment: Several commenters request clarification or revision 
of the definitions of ``dissolution'' and ``disruption'' in Sec.  96.2. 
One commenter suggests that the Department and Congress (in the IAA) 
reversed the meaning of these terms. Another commenter requests that 
the definitions of ``disruption'' and ``dissolution'' be revised to 
state explicitly that a disruption or dissolution must be included in 
the overall statistics of adoption failures only if it occurs while an 
adoptee is physically residing with a family in their home at the time 
of the disruption or dissolution. Similarly, another commenter is 
concerned that the Department's definition of ``disruption'' is too 
broad and could force agencies and persons to generate reports in cases 
in which the disruption had benign causes. One commenter suggests that 
the definition of ``disruption'' should be revised to address more 
specifically the ``disruptions that occur after a child has left his or 
her country of origin.'' A commenter suggests the following 
definitions: `` `Disruption' means adoptive placement that does not 
finalize in an adoption. `Dissolution' means dissolving the adoptive 
placement through termination of parental rights.''
    Response: In defining ``disruption'' to refer to an interrupted 
adoptive placement, the Department followed Sec.  104(b)(3) of the IAA, 
which used ``disruption'' in the same manner. We

[[Page 8072]]

also believe that the majority of people involved with intercountry 
adoptions use the terms ``disruption'' and ``dissolution'' as we have 
defined them. Therefore, the Department is not changing the definitions 
of ``disruption'' and ``dissolution'' to, in effect, reverse them.
    The Department has, however, revised the definition of 
``disruption'' and has modified related definitions and reporting 
requirements, to clarify when a ``disruption'' will need to be 
reported. ``Disruption'' is now defined to mean the interruption of a 
placement for adoption during the ``post-placement'' period. ``Post-
placement'' now is defined so that a ``disruption'' will need to be 
reported only when it takes place after legal custody or guardianship 
of the child has been transferred to the prospective adoptive parent(s) 
or a custodian for transport to the prospective adoptive parent(s), but 
before the adoption is completed. Thus, an agency or person would not 
need to report a ``disruption'' if a prospective adoptive family 
decided not to pursue an adoption during an informal placement pending 
transfer of legal custody of the child. On the other hand, a 
``disruption'' would need to be reported if it happened after legal 
custody or guardianship of the child was transferred, even if the child 
had not yet left his or her country of origin.
    We have also modified the definition of ``dissolution'' to reflect 
the addition to Sec.  96.2 of a definition of ``post-adoption,'' and to 
respond to the suggestion that we make specific reference to 
termination of parental rights. The final rule defines ``dissolution'' 
to be the termination of the adoptive parent(s)' parental rights after 
an adoption.
    14. Comment: One commenter requests that the Department add to 
Sec.  96.2 a definition of a foreign Convention ``accredited body.'' 
Another commenter similarly suggests adding a definition for ``foreign 
partner providers''--entities accredited or approved by a Convention 
country and providing one or more adoption services in a Convention 
case. The commenter also recommends defining ``foreign governmental 
partner providers,'' as public authorities of a Convention country 
(excluding courts) providing one or more adoption services in a 
Convention case.
    Response: The Department believes that it is unnecessary to add a 
definition for foreign accredited bodies or ``foreign partner 
providers.'' Subpart C explains when foreign providers accredited by a 
Convention country must operate under the supervision and 
responsibility of a primary provider. Please see response to comment 1 
for Sec.  96.14. We also believe that the definitions of ``public 
foreign authority'' and ``competent authority'' are adequate to refer 
to public authorities of Convention countries.
    15. Comment: A commenter requests that the Department make clear, 
in the definition of ``legal services,'' that it is not regulating the 
actions of foreign attorneys. The commenter also cautions the 
Department that it cannot regulate attorneys licensed in the United 
States because they are regulated by the States. Thus, the commenter 
believes that the Department is incorrect when it asserts (in the 
preamble to the proposed rule) that a lawyer who secures necessary 
consents to the termination of parental rights and to adoptions in 
Convention cases must be approved or must secure the consents as part 
of, or under the supervision and responsibility of, an accredited 
agency, temporarily accredited agency, or an approved person.
    Response: The IAA and these regulations are not intended to preempt 
State laws regarding licensing of attorneys; on the other hand, under 
the IAA, persons, including lawyers, who provide adoption services in 
the United States, as opposed to legal services, must comply with the 
IAA. Section 201(b)(3) of the IAA states that the provision of legal 
services by a person ``who is not providing any adoption service in the 
case'' is exempt from the accreditation/approval requirements. The 
exemption does not apply, however, if the attorney is providing (non-
exempt) adoption services in the case. An adoption service, as defined 
in the IAA, provided by a U.S. attorney, or through a U.S. accredited/
approved provider's use of the services of a foreign attorney, in 
connection with a Convention case would need to provided in compliance 
with any applicable requirements of the IAA and these regulations, 
regardless of any professional standards or licensing or other laws 
that would also govern the actions of the attorney. We note, however, 
that the rule would allow a primary provider to treat a foreign 
attorney that provided only the adoption service of obtaining consents 
in a Convention country as either a supervised provider, consistent 
with Sec. Sec.  96.45(a) and (b), or as performing a service qualifying 
for verification under Sec.  96.46(c)).

Subpart B--Selection, Designation, and Duties of Accrediting Entities

    Subpart B is organized in the same way as in the proposed rule, and 
includes Sec.  96.4 (Designation of accrediting entities by the 
Secretary); Sec.  96.5 (Requirement that accrediting entity be a 
nonprofit or public entity); Sec.  96.6 (Performance criteria for 
designation as an accrediting entity); Sec.  96.7 (Authorities and 
responsibilities of an accrediting entity); Sec.  96.8 (Fees charged by 
accrediting entities); Sec.  96.9 (Agreement between the Secretary and 
the accrediting entity); Sec.  96.10 (Suspension or cancellation of the 
designation of an accrediting entity by the Secretary); and Sec.  96.11 
(Reserved).
    We have made a number of changes to this subpart in response to 
public comment, including changes to Sec. Sec.  96.6, 96.7, and 96.10, 
which are discussed below. We also deleted from Sec.  96.4(a) material 
on soliciting accrediting entities that is no longer relevant and made 
additional clarifying corrections to Sec.  96.4(a), to make plain that 
accrediting entities will be designated by the Department in an 
agreement that will also govern operations of the accrediting entity. 
Finally, we made conforming changes to Sec.  96.7(b), to ensure 
consistency with changes made to the definition of Complaint Registry 
in Sec.  96.2 and to subpart J.

Section 96.4--Designation of Accrediting Entities by the Secretary

    1. Comment: Several commenters are concerned that having too few 
accrediting entities will create a monopoly, with accrediting entities 
charging exorbitant accrediting fees and possibly putting smaller 
agencies out of business. Other commenters encourage the Department to 
limit the number of accrediting entities to avoid accrediting entities 
competing for the business of the very people they are supposed to be 
regulating.
    Response: Section 202(a)(1) of the IAA states that the ``Secretary 
shall enter into agreements with one or more qualified entities'' that 
will perform the duties of an accrediting entity (emphasis added). The 
IAA permits public entities to act as accrediting entities in part to 
increase the number of possible accrediting entities. (See IAA section 
202(a)(2)(B)). The Department has used extensive outreach efforts to 
solicit a broad pool of interested parties to apply to become 
accrediting entities. We will not know the actual, final number of 
accrediting entities until we are able to enter into agreements with 
qualified applicants, but it is clear the number will be small, at 
least initially. There is no reason at this time to limit the number by 
regulation. The quality and fairness of the accrediting entities will 
not be addressed by the number of such entities but by the Department 
designating accrediting entities that are

[[Page 8073]]

qualified under the IAA and that meet the criteria established in these 
regulations and through the Department's ongoing oversight, including 
its oversight of accreditation fees, which under the IAA and these 
regulations may not exceed the costs of accreditation.
    2. Comment: Some commenters are concerned that the Department did 
not provide public entities enough time or information to allow them to 
submit Statements of Interest to become accrediting entities. These 
commenters suggest that the Department should individually contact all 
public entities that do adoption licensing and invite them to apply. 
Similarly, many commenters want the regulations to mandate that every 
State licensing authority act as an accrediting entity for Convention 
purposes.
    Response: The IAA does not authorize the Department to require all 
qualified public entities to become accrediting entities, but the 
Department did contact each relevant State authority and encourage it 
to apply to become an accrediting entity. The Department expects to 
provide additional open application periods for public entities or 
private nonprofit entities to apply to become accrediting entities at a 
future time.
    3. Comment: Commenters believe that the Department should not 
delegate the function of accrediting agencies and approving persons to 
accrediting entities. These commenters suggest that the Department 
should act as the single accrediting entity for all agencies and 
persons, in order to bring uniformity to the application of accrediting 
standards and promote an emphasis on the best interests of the 
children.
    Response: The IAA requires that the Department enter into 
agreements with qualified public entities or qualified nonprofit 
organizations to be accrediting entities. The Department cannot act 
directly as an accrediting entity.
    4. Comment: Several commenters recommend that the Department, 
rather than an accrediting entity, investigate allegations of improper 
conduct involving agencies and persons overseas.
    Response: Under the IAA, accrediting entities are given primary 
responsibility for overseeing the conduct of the agencies and persons 
they accredit or approve. As explained in the response to comment 1 on 
Sec.  96.6, below, the accrediting entity will be responsible for 
monitoring agencies it accredits or temporarily accredits and persons 
it approves, including by monitoring their use of all supervised 
providers, including foreign supervised providers. The Department is 
required to take the direct action of suspension or cancellation 
against an accredited agency or approved person only if the accrediting 
entity has failed or refused, after consultation with the Department, 
to take appropriate enforcement action itself.
    5. Comment: Some commenters request that the Department prohibit 
current State licensing authorities from becoming accrediting entities. 
One commenter suggests that these public domestic authorities have not 
been responsive in the past to the concerns of adopting parents. A 
commenter also asserts that the IAA was enacted in part because States 
were unable to regulate adoption effectively, and apparently is 
concerned that state licensing authorities that are accrediting 
entities will assert sovereign immunity, or in any event will not 
accord ``consumers'' sufficient ``due process.'' This commenter seems 
to contemplate suits against accrediting entities by ``consumers'' 
rather than the kind of judicial review of adverse action specifically 
addressed by the IAA.
    Response: As stated above, the IAA permits qualified public 
entities to become accrediting entities and the Department intends to 
consider qualified public entities as potential accrediting entities. 
The Department believes the commenters' concerns about the likely 
responsiveness of public entities will be addressed by the Department 
designating public entities as accrediting entities only if they 
demonstrate that they are qualified under the IAA and can meet the 
criteria established in these regulations. The Department will also 
maintain ongoing oversight of all accrediting entities. In particular, 
the Department's agreements with the accrediting entities, which will 
be published in the Federal Register, will address accountability of 
the accrediting entities to the Secretary. Also, in this regard, the 
public will be able to complain about the performance of any 
accrediting entity to the Department, and the Department will be able 
to suspend or cancel the designation of any accrediting entity, as set 
forth in Sec.  96.10 of the rule. As well, subpart J ensures that the 
Department will be able to oversee the performance of all accrediting 
entities in resolving complaints against adoption service providers. As 
for the concern about sovereign immunity and the ``due process'' rights 
of ``consumers,'' nothing in these regulations is intended to create 
rights vis-[agrave]-vis any accrediting entity, whether public or 
private nonprofit. Consistent with this, we have made clear in Sec.  
96.12, as discussed in the response to comment 7 on this section, 
below, that the conferral of accreditation or approval does not make an 
accrediting entity responsible for any acts of any entity providing 
services in connection with a Convention adoption and does not 
guarantee that in any specific case an accredited agency or approved 
person is providing adoption services consistently with the Convention, 
the IAA, the regulations implementing the IAA, or any other applicable 
law.
    6. Comment: Commenters recommend that the Department add a 
mechanism for the public to challenge a decision by the Department to 
designate or not designate a public domestic authority or nonprofit 
organization as an accrediting entity.
    Response: The Department's selection of accrediting entities is 
committed to the Department's discretion. Moreover, section 504 of the 
IAA provides that the Convention and the IAA shall not be construed to 
create a private right of action to seek administrative or judicial 
relief, except to the extent expressly provided in the IAA. Once the 
Department has signed an agreement with an accrediting entity, however, 
anyone will be able to submit a complaint regarding an accrediting 
entity directly to the Department. Section 96.10(a) of these 
regulations requires that such complaints be considered in determining 
whether an accrediting entity's designation should be suspended or 
canceled.
    7. Comment: Potential accrediting entities suggest that the 
Department add a provision to Sec.  96.4 to limit the liability of 
accrediting entities. Without such a provision, potential accrediting 
entities have suggested that it will be difficult to hire or retain 
evaluators/peer reviewers and that the fees for accreditation will be 
significantly higher to cover the risk of third-party litigation.
    Response: The Department never intended that accrediting entities 
be responsible for third-party tort claims, and does not believe that 
the IAA suggests that they should be. While we have not revised Sec.  
96.4, we have added language to Sec.  96.12 to underscore that 
conferral and maintenance of accreditation, temporary accreditation, or 
approval is not tantamount to a guarantee that adoption services in 
specific cases are performed consistently with the Convention, the IAA, 
the regulations implementing the IAA, or any other applicable law but 
rather establishes only that the accrediting entity has concluded that 
the agency or person provides services in substantial compliance with 
the

[[Page 8074]]

applicable standards set forth in this part.
    8. Comment: Two commenters suggest that an agency, person, or other 
interested party should have the opportunity to file a complaint 
against an accrediting entity or to challenge the accrediting entity's 
interpretation of a regulation or law.
    Response: The Department will accept and collect complaints against 
accrediting entities pursuant to Sec.  96.10(a). (The Department 
intends to post on its website instructions for how to submit a 
complaint against an accrediting entity.) As part of its ongoing 
oversight responsibility, the Department will investigate and consider 
any complaints against an accrediting entity when determining whether 
an accrediting entity's designation should be suspended or cancelled. 
Please note that the accrediting entities are responsible for 
investigating complaints against agencies and persons.
    Section 202(c)(3) of the IAA allows an agency or person that has 
been the subject of an adverse action by any accrediting entity to seek 
Federal court review to have the adverse action set aside. For a 
description of the accrediting entity's role with regard to terminating 
adverse actions, see the responses to comment 1 for Sec.  96.78 and 
comment 1 for Sec.  96.79.

Section 96.5--Requirement that Accrediting Entity be a Nonprofit or 
Public Entity

    1. Comment: Some commenters believe that the current language of 
Sec.  96.5 implies that only existing organizations can become 
accrediting entities (which will only exacerbate the potential for a 
monopoly of accrediting entities). These commenters note that Sec.  
96.5 states that an accrediting entity must ``qualify'' as either a 
nonprofit organization or a public entity. They have asked for 
clarification that, in the future, accreditation will be open to new 
organizations as well. They also propose the following language: ``An 
accrediting entity must qualify as * * * (a) an organization or 
proposed organization described in section 501(c)(3) of the Internal 
Revenue Code of 1986.''
    Response: The Department does not believe there is a need for new 
language to cover ``proposed'' accrediting entities. Although the first 
application period for those interested in becoming accrediting 
entities closed on April 30, 2004, there will be opportunities in the 
future for another round of applications. At that time, any public 
entities and nonprofits that express interest in becoming accrediting 
entities will have the opportunity to demonstrate that they meet the 
IAA criteria and that they have the capacity to perform the duties of 
an accrediting entity.
    2. Comment: One commenter suggests that Sec.  96.5(a) should be 
removed because there is no advantage to restricting for-profit 
entities from being accrediting entities.
    Response: The Department is retaining Sec.  96.5(a); its 
requirements come directly from Sec.  202(a) of the IAA, under which 
for-profit private entities are not qualified to be accrediting 
entities.

Section 96.6--Performance Criteria for Designation as an Accrediting 
Entity

    1. Comment: One commenter recommends that the Department modify the 
rule to require an accrediting entity to demonstrate that it has the 
ability to monitor the performance of accredited agencies and approved 
persons and their supervised providers.
    Response: Section Sec.  96.6(c) already required the accrediting 
entity to demonstrate to the Department that it can monitor the 
performance of accredited agencies, temporarily accredited agencies, 
and approved persons. In addition, the Department has modified 
Sec. Sec.  96.6(c) and 96.7(a)(4) to make it explicit that accrediting 
entities must demonstrate that they are capable of monitoring a primary 
provider's use of supervised providers. We are aware that public 
entities and nonprofits designated as accrediting entities will likely 
have limited capacity to investigate overseas conduct directly, but we 
still expect them to use all reasonable means available to them of 
evaluating an accredited agency's or approved person's use of a 
supervised provider overseas. Such means would include, but not be 
limited to, document review and interviews to check that the agency or 
person is complying with the requirements of Sec.  96.45 for using 
supervised providers in the United States and of Sec.  96.46 for using 
supervised providers in Convention countries.
    2. Comment: A commenter recommends that the Department revise Sec.  
96.6(f) insofar as it requires an accrediting entity that is not a 
public entity to demonstrate that it operates independently of any 
organization that includes agencies or persons that provide adoption 
services, noting that membership associations have played a valuable 
role in the development and support of accrediting entities. The 
commenter suggests that this section instead permit an accrediting 
entity to demonstrate that membership organizations will not have 
inappropriate influence on an accrediting entity, and that the 
accrediting entity has conflict-of-interest policies to address its 
relationships with membership organizations.
    Response: We have not made the suggested change to Sec.  96.6(f), 
but we have added a new Sec.  96.6(i) providing that the accrediting 
entity must prohibit conflicts of interest with any agency, person, or 
membership organization that includes agencies or persons. With this 
addition it should be clear that Sec.  96.6(f) does not bar accrediting 
entities that are not public entities from being associated with 
membership organizations, which we have been told can play a valuable 
role in helping to identify and maintain best practices within the 
field of adoption. At the same time, it is critical that accrediting 
entities be neutral and objective in evaluating agencies and persons 
and avoid the appearance of partiality. Potential problems may be 
avoided if accrediting entities operate independently of membership 
organizations with which they are associated and that include agencies 
or persons that provide adoption services. When the Department 
addresses conflict-of-interest issues in the agreements with the 
accrediting entities under Sec.  96.6(h), it may include specific 
safeguards for accrediting entities' involvement with such membership 
organizations.
    3. Comment: Some commenters ask that the Department expand the 
conflict-of-interest provisions of Sec.  96.6(h) and set conflict-of-
interest prohibitions through rulemaking. Another commenter requests 
that the Department specifically forbid any board member or employee 
who works with or for an agency or person or that is related to an 
agency or person from serving as a board member or employee of an 
accrediting entity. Another commenter suggests that the conflict-of-
interest provisions should prohibit employees of accrediting entities 
or volunteer evaluators from becoming employed by an adoption service 
provider for at least one year after participating in any accreditation 
service for that provider.
    Response: In response to these comments, the Department has 
modified the final rule to include two new conflict-of-interest 
provisions. First, we have added Sec.  96.6(i) to require that an 
accrediting entity demonstrate that it prohibits conflicts of interest 
with agencies or persons or with any membership organization that 
includes agencies or persons. Second, we added Sec.  96.6(j) to require 
accrediting entities to demonstrate that they prohibit individuals 
directly involved with the

[[Page 8075]]

site evaluation of a particular agency or person from becoming 
employees or supervised providers of that same agency or person for at 
least one year. Consistent with section 202(a)(1) of the IAA, the 
Department may establish other appropriate conflict-of-interest rules 
in the agreements with accrediting entities.

Section 96.7--Authorities and Responsibilities of an Accrediting Agency

    1. Comment: One commenter suggests that the Department should 
require that accrediting entities investigate and respond to complaints 
about the supervised providers of accredited agencies and approved 
persons.
    Response: As described in subpart J of these rules, the Complaint 
Registry will refer complaints about accredited agencies and approved 
persons to an accrediting entity. If a complaint involves conduct of a 
supervised provider, the accrediting entity will need to check whether 
the accredited agency or approved person that is acting as the primary 
provider has provided adequate supervision of its supervised providers. 
If an accredited agency or approved person does not provide adequate 
supervision of its supervised providers, it will be out of compliance 
with the standards in Sec. Sec.  96.45 and 96.46 related to use of 
supervised providers. The accrediting entity may, if the complaint is 
supported, take adverse action against an accredited agency or approved 
person for reasons related to its use of a supervised provider. Section 
96.71 requires accrediting entities to establish written procedures, 
including deadlines, for recording, investigating, and acting upon such 
complaints.
    2. Comment: A commenter recommends that the Department add a 
statement to Sec.  96.7(a)(7) to clarify that accrediting entities are 
permitted to report information relating to suspected child abuse to 
responsible State authorities.
    Response: The Department does not believe it is necessary to add 
such language. Nothing in Sec.  96.7(a) prevents an accrediting entity 
from reporting suspected child abuse to the appropriate State 
authorities, and this section does not change State laws regarding 
mandatory reporting of suspected child abuse. Furthermore, Sec.  
96.72(b)(3) requires an accrediting entity, after consultation with the 
Department, to refer to law enforcement authorities any substantiated 
complaints that involve conduct that is in violation of Federal, State, 
or local law.
    3. Comment: Two commenters object to Sec.  96.7(a)(8), on transfer 
of Convention cases, and ask that it be removed from the regulations. 
One of the commenters believes that this requirement puts accrediting 
entities in the awkward position of having to choose, or make 
recommendations regarding, which agencies and persons should be 
assigned the Convention cases that need to be transferred. The other 
commenter believes that it is essential for an accrediting entity to 
transfer Convention cases pursuant to Sec.  96.7(a)(8), but recommends 
that the Department develop specific criteria for the selection of 
organizations to accept the transfer of these cases.
    Response: We have modified Sec.  96.7 (and provisions in subparts 
K, L, and N) so that accrediting entities are responsible for assisting 
the Department in taking appropriate action to help the agency or 
person transfer its Convention cases and adoption records. We now 
require in Sec. Sec.  96.33(e) and 96.42(d) that agencies and persons 
have a plan to transfer their Convention cases and adoption records in 
the event that they become unable to continue performing Convention 
adoptions. If an agency's or person's plan fails, Sec.  96.77(c) now 
requires accrediting entities to advise the Department, which, with the 
assistance of the accrediting entity, will coordinate efforts to 
identify other accredited agencies or approved persons to assume 
responsibility for the Convention cases and to transfer the records to 
other accredited agencies or approved persons, or to public domestic 
authorities, as appropriate. Corresponding comments were made to 
Sec. Sec.  96.87 and 96.109.

Section 96.8--Fees Charged by Accrediting Entities

    1. Comment: One commenter requests, for reasons of fairness, that 
the Department add a provision to the rules that mandates that fees for 
accrediting services will be uniform across geographic and 
jurisdictional boundaries. On the other hand, another commenter 
supports the Department's decision to permit fees to vary based on the 
relative size, geographic location, and volume of Convention cases of 
an accredited agency or approved person. Two other commenters express 
concern about the cost of accreditation.
    Response: Section 202(d) of the IAA requires that, in approving the 
fees set by an accrediting entity, the Department ``consider the 
relative size of, the geographic location of, and the number of 
Convention adoption cases managed by the agencies or persons subject to 
accreditation or approval by the accrediting entity.'' Therefore, the 
Department does not have the discretion to ignore these factors when 
approving fees. In addition, while fees may not exceed the costs of 
accreditation, it is possible that some public entities that are 
designated as accrediting entities may choose to subsidize the cost of 
accreditation in their States, creating additional possible variance in 
fees. The Department will review and approve accrediting entity fee 
schedules for compliance with the IAA's requirements. Approved fee 
schedules will be publicly available, which should allow comparison of 
fees.
    2. Comment: Several commenters suggest that it is difficult to 
comment on the fee provisions of the regulations because the Department 
did not provide a fee schedule or an estimate of the accreditation 
fees.
    Response: This regulation does not address the actual fees of the 
accrediting entities, which are not subject to rulemaking, but only the 
factors the Department will consider in deciding whether to approve fee 
schedules that the accrediting entities propose. The regulation closely 
tracks the statute, leaving the Department flexibility to approve or 
disapprove proposed fees in light of the IAA's requirements. Given the 
wide range of possible fee structures and the start-up nature of the 
accreditation process, it is not practicable to further regulate on 
this issue at this time. Nor can the Department predict what the actual 
approved fees will be after the proposed fees are reviewed in light of 
the statutory and regulatory criteria.
    3. Comment: A commenter suggests that Sec.  96.8(d), which states 
``[n]othing in this section shall be construed to provide a private 
right of action to challenge any fee charged by an accrediting entity'' 
was the equivalent of ``taxation without representation.''
    Response: We have retained Sec.  96.8(d) because it is consistent 
with section 504 of the IAA, which prohibits inferring private rights 
of action under the IAA and the Convention, except as provided by the 
IAA.
    4. Comment: A commenter is concerned that, while the regulations 
require accrediting entities to investigate complaints about accredited 
agencies and approved persons, they provide for the allowable fees for 
such investigatory services to be predetermined and published in the 
fee schedule pursuant to Sec.  96.8, the implication being that the 
fees may prove inadequate to support the necessary investigation. The 
commenter suggests that the Department remove the responsibility for 
investigating accredited agency and approved person

[[Page 8076]]

wrongdoing from accrediting entities and retain that responsibility for 
itself.
    Response: The IAA requires that accrediting entities investigate 
and review complaints against the agencies and persons that they 
accredit or approve. Under section 204(b) of the IAA, the Department is 
only required to take adverse action against an agency or person if it 
finds that the accrediting entity has failed or refused, after 
consultation with the Department, to take appropriate enforcement 
action. Accrediting entities are supposed to incorporate anticipated 
costs, including the costs of complaint review and investigations and 
routine oversight and enforcement, into their proposed fees. When the 
Department approves fees, we plan to ensure that the accrediting entity 
has budgeted for such expenses. In addition, Sec.  96.8(b)(2) provides 
that ``separate fees based on actual costs incurred may be charged for 
the travel and maintenance of evaluators.'' If an accrediting entity 
finds that its actual expenses are far greater than it had anticipated 
in creating its fee schedules, and its fees are not sufficient to cover 
its operating expenses, it may apply to the Department to change its 
fee schedule.
    5. Comment: A commenter recommends that the Department allow 
accrediting entities to revise their fee schedules from time to time 
with the approval of the Department.
    Response: Pursuant to Sec.  96.8(a), accrediting entities may 
propose changes to an approved fee schedule, subject to approval by the 
Department. Upon approval, the modified fee schedule will be made 
available to the public.
    6. Comment: A commenter thinks that the Complaint Registry should 
be funded through a portion of accrediting fees or by the Department. 
The commenter also believes that applicants for accreditation should 
pay a single, non-refundable fee for pre- and post-accreditation/
approval work. The commenter requests, however, that the Department 
clarify that public bodies, such as State licensing authorities, are 
permitted to charge similar accrediting fees.
    Response: Under this final rule, the Department retains the 
discretion to determine how to fund the Complaint Registry, including 
through fees collected by the accrediting entities and/or by the 
Department. Section 96.8 explains the costs which may be included in 
any fee for accreditation and approval, including costs for complaint 
review and investigation and routine oversight and enforcement, and 
requires any such fee to be non-refundable. The fee provisions apply to 
any accrediting entity, including a public entity that has authority 
under State law to collect accrediting fees.

Section 96.9--Agreement Between the Secretary and the Accrediting 
Entity

    1. Comment: A commenter states that there must be a mechanism in 
the regulations to ensure consistent interpretations of the Convention, 
the IAA, and the Department's regulations by accrediting entities 
across geographic regions. The commenter requests that the Department 
outline uniform standards in the regulations.
    Response: These regulations do create uniform accreditation 
standards and procedures for all accrediting entities. The criteria to 
be used by all accrediting entities are listed in subpart F (and with 
regard to temporarily accredited agencies in subpart N). The procedures 
applicable to the accreditation process are provided in subparts D 
through N, excluding F. The Department, in its oversight and monitoring 
role, will ensure that all accrediting entities adhere to these uniform 
standards and procedures. Please also see the response to comment 1 on 
Sec.  96.66.
    2. Comment: A commenter states that the Department should submit 
all matters listed in Sec.  96.9 to a notice and comment period instead 
of setting them by agreement. The commenter states that these subjects 
are or may be crucial, and require an opportunity for public comment. 
The commenter further believes that it is unlikely that the regulations 
will be upheld in court unless the Department submits these matters to 
notice and comment.
    Response: Section 202(a) of the IAA requires the Department to 
enter into agreements with one or more qualified accrediting entities 
under which such entities will perform certain duties in accordance 
with the Convention, the IAA, and these regulations. While the IAA 
requires that the standards to be used by the accrediting entities to 
accredit or approve agencies or persons to provide adoption services in 
Convention cases be set by regulation, it does not require that the 
Department's agreements designating accrediting entities be subject to 
public comment--such a requirement would be unworkable. Nonetheless, 
the Department will publish the final agreements in the Federal 
Register.

Section 96.10--Suspension or Cancellation of the Designation of an 
Accrediting Entity by the Secretary

    1. Comment: A commenter asks how the Department will determine 
whether accrediting entities are in substantial compliance with the 
regulations. The commenter also requests clarification on how 
accrediting entities will be given notice of any complaints or concerns 
that may arise so that they have an opportunity to respond to the 
concerns and to correct any deficiencies.
    Response: The Department has added Sec.  96.10(b), which requires 
the Department to notify an accrediting entity in writing of any 
deficiencies in the accrediting entity's performance that could lead to 
the cancellation or suspension of its designation as an accrediting 
entity. The accrediting entity will be given an opportunity to 
demonstrate that suspension or cancellation is unwarranted, in 
accordance with mutually agreed upon procedures for handling complaints 
against the accrediting entity established in the agreement between the 
Department and the accrediting entity described in Sec.  96.9. Section 
96.10(c) now lists the factors that the Department will consider to 
determine whether an accrediting entity is substantially in compliance 
with these regulations, the IAA, and the Convention.
    2. Comment: A commenter asks whether accrediting entities will be 
able to appeal any adverse decision by the Department regarding 
cancellation or suspension without having to go to court.
    Response: Under section 204(d) of the IAA, an accrediting entity 
that is the subject of a final action of suspension or cancellation may 
petition the United States District Court for the District of Columbia 
or the United States District court in the judicial district in which 
the accrediting entity is located to set aside the action by the 
Department. The IAA does not provide for administrative review of 
cancellation or suspension of an accrediting entity by the Department. 
Section 96.10(b) of the rule now provides, however, that prior to the 
action being taken, an accrediting entity will be given an opportunity 
to demonstrate to the Department that suspension or cancellation would 
be unwarranted.

Subpart C--Accreditation and Approval Requirements for the Provision of 
Adoption Services

    Subpart C is organized the same way as in the proposed rule, except 
that the Department has added a new Sec.  96.15 (Examples) and 
consequently renumbered Sec.  96.15 (Public domestic authorities) and 
Sec.  96.16 (Effective date of accreditation and approval requirements) 
as Sec. Sec.  96.16 and 96.17 respectively. Subpart C also contains 
Sec.  96.12 (Authorized adoption service providers); Sec.  96.13 
(Circumstances in

[[Page 8077]]

which accreditation, approval, or supervision is not required); and 
Sec.  96.14 (Providing adoption services using other providers).
    The Department made a number of changes to this subpart in response 
to public comments, including changes to Sec. Sec.  96.12, 96.13, 96.14 
and 96.15. As discussed above in addressing Sec.  96.4 comment 7, the 
Department has added a new Sec.  96.12(c) to underscore that conferral 
and maintenance of accreditation, temporary accreditation, or approval 
is not tantamount to a guarantee that adoption services in specific 
cases are performed consistently with the Convention, the IAA, the 
regulations implementing the IAA, or any other applicable laws, but 
rather establishes only that the accrediting entity has concluded that 
the agency or person conducts adoption services in substantial 
compliance with the applicable standards set forth in this part. 
Section 96.13 has also been revised to clarify that, like Sec.  96.12, 
it addresses services being provided in the United States in connection 
with a Convention adoption.
    As discussed in section III, subsection A of the preamble, above, 
Sec.  96.14 of the final rule differs from the proposed rule in its 
treatment of the responsibilities of a primary provider with respect to 
its use of other providers of adoption services in the United States 
and in Convention countries. The Department has revised Sec.  96.14(b) 
and Sec.  96.14(d) to require that, except as otherwise provided, in 
providing adoption services in the United States for a Convention case, 
a primary provider must treat other accredited agencies, temporarily 
accredited agencies, and approved persons as supervised providers under 
its responsibility and supervision. The response to comment 1 on Sec.  
96.14, below, discusses similar changes to Sec.  96.14(c), the result 
of which is generally to require a primary provider to treat all non-
governmental foreign providers as supervised providers, consistent with 
the standards in Sec. Sec.  96.46(a) and (b), regardless of whether 
accredited by a Convention country, with a limited exception. The 
exception is provided for in Sec.  96.14(c)(3), which allows a primary 
provider to use any foreign provider in a Convention country to obtain 
consents or perform a child background study in an incoming case, or to 
perform a home study in an outgoing case, so long as the primary 
provider verifies the provision of the service, in accordance with the 
standards set out in Sec.  96.46(c).

Section 96.12--Authorized Adoption Service Providers

    1. Comment: A commenter asks what will happen to intercountry 
adoption cases already in progress once the Convention enters into 
force.
    Response: We have modified Sec.  96.12(a) to make explicit 
reference to section 505(b) of the IAA and to clarify that cases in 
progress are not within the scope of this rule. Section 505 of the IAA 
establishes how entry into force of the Convention for the United 
States will affect cases in progress (so-called ``pipeline cases''). In 
general, adoption cases that are initiated, either in the United States 
or in a Convention country, before the entry into force of the 
Convention for the United States will not be treated as Convention 
cases subject to the IAA. If any further transition rules prove to be 
necessary, the Department will consider undertaking an additional 
rulemaking procedure.
    2. Comment: Commenters ask if an agency or person will need to be 
accredited/approved if they handle adoptions from a country whose 
ratification or accession to the Convention has not been recognized by 
the United States. A commenter requests that the Department clarify 
when an agency or person will be required to be accredited or approved 
if they are handling intercountry adoption cases involving a country 
that is in the process of ratifying the Convention.
    Response: Once the Convention has entered into force for the United 
States, an agency or person operating in the United States needs to be 
accredited, temporarily accredited, approved, or supervised or exempted 
only if it is performing adoption services in a Convention adoption. An 
adoption will not be considered a Convention adoption unless the 
Convention has entered into force between the United States and the 
other country involved. The Convention will not be in force between the 
United States and the other country if the other country has not yet 
ratified, approved, or acceded to the Convention, or if the United 
States does not recognize another country's accession to the 
Convention, as permitted by Article 44 of the Convention in certain 
circumstances.
    With respect to the question of when agencies and persons handling 
intercountry adoptions will need to be accredited or approved to handle 
adoptions from countries whose subsequent ratification, approval, or 
accession the United States recognizes, we expect that this question 
will be largely governed by the other country's implementing 
proclamation. We note, however, that under Articles 14 and 41 of the 
Convention, we would expect the Convention to apply only to cases that 
arise after the Convention enters into force between the United States 
and the new Convention country, not to cases already in progress.
    For a full list of countries that have already ratified or acceded 
to the Convention, please refer to the Web site of the Hague Conference 
on Private International Law at http://www.hcch.net. From the home 
page, click ``Welcome,'' click ``Conventions'' from the left hand menu, 
click Convention No. 33 in the list provided, and then click ``Status 
table'' from the right hand menu. (The direct Web address is http://hcch.e-vision.nl/index_en.php?act=conventions.status&cid=69) If an 
entry into force or ``EIF'' date appears in connection with a country, 
and the United States has not objected to the accession (which would be 
shown by clicking on ``A**'' in the Type column), then it is a 
Convention country. The Web site also lists the countries, like the 
United States, that have signed the treaty but for whom the treaty has 
not yet entered into force.
    3. Comment: A commenter is concerned that mandatory accreditation 
will create a burden for agencies and persons. The commenter requests 
that subpart C permit voluntary accreditation. The commenter also 
recommends that the Department encourage agencies working in non-
Convention countries to seek accreditation voluntarily.
    Response: Consistent with the Convention, section 201 of the IAA 
creates a mandatory accreditation and approval system for Convention 
adoptions. On the other hand, the IAA does not give the Department 
authority to require accreditation or approval for non-Convention 
cases. Thus no changes are warranted in light of these comments.

Section 96.13--Circumstances in Which Accreditation, Approval, or 
Supervision Is Not Required

    1. Comment: Several commenters believe that an exempted provider 
should be a social work professional or organization that is performing 
a home study but is not currently providing any other adoption service. 
They believe this would allow the exempt organization to become a 
supervised provider later, once a client selects a placing agency that 
will require post-placement services from the home study provider.
    Response: The Department has changed the definition of exempted

[[Page 8078]]

provider, as noted in the response to comment 9 on Sec.  96.2. The 
changes to the definition are meant to clarify that the event that 
triggers the accreditation/approval requirement is the provision of an 
adoption service other than a home study or child background study. 
Until an agency or person begins to provide such a non-exempt adoption 
service in addition to a home study report (or child background study), 
it is not required to be accredited or approved. (Note that the 
Department has modified the language of Sec.  96.13(a) to remove a 
repetitive restatement of the definition of exempted provider found in 
Sec.  96.2; this modification does not change the fact that a home 
study preparer or child background study preparer who is not currently 
and has not previously provided any other adoption service in the case 
is exempt from accreditation/approval.) If the exempted adoption 
service provider is simultaneously or subsequently asked to perform an 
additional adoption service in the case, however, the adoption service 
provider at that time would be required to become accredited, approved, 
or supervised before providing the additional adoption service in the 
United States. The examples numbered 3, 5, and 6 in Sec.  96.15 
illustrate the circumstances in which a home study provider is exempt 
and circumstances in which the provider would need to become accredited 
or approved or supervised. Example 4 in Sec.  96.15 illustrates 
circumstances in which a child background study provider would be 
exempt.
    2. Comment: One commenter suggests that exempted providers should 
be allowed to provide both home study services and post-placement 
services, because no agency can easily survive performing only home 
studies. Another commenter believes it is impractical to exempt only 
home study services and not post-placement services.
    Response: The IAA specifically includes post-placement monitoring 
as an adoption service that requires an agency or person to be 
accredited, temporarily accredited, approved, or supervised.
    Like post-adoption services and child welfare services, post-
placement services other than post-placement monitoring are not 
adoption services, as discussed in the response to comment 4 on Sec.  
96.2. The change to the definition of exempted provider should clarify 
that providers of home studies and/or child background studies in the 
United States who have not performed any other adoption service in 
connection with a case are exempted providers until they provide a 
subsequent adoption service, such as post-placement monitoring. Thus a 
provider may offer any combination of ``exempt services'' (child 
background studies and home studies), child welfare services (such as 
post-adoption services), and other non-adoption services (such as legal 
services) in a case without being required to be accredited, 
temporarily accredited, approved, or supervised. This is further 
discussed in the response to comment 6, below, explaining changes to 
Sec.  96.13(b) and (c). Please also see example 8 in Sec.  96.15, 
regarding post-placement monitoring, for a concrete illustration.
    3. Comment: Several commenters recommend that the home study or 
child background study prepared by an exempted provider be submitted to 
an accredited agency or temporarily accredited agency for review and 
re-approval. The commenters assert that clarifying that the report will 
be re-approved instead of approved denotes that the study was approved 
first by the home study agency as required by State and Federal 
regulations, and then was submitted to the accredited or temporarily 
accredited agency for re-approval.
    Response: The Department is not making this change because we 
believe the rule, as written, addresses the commenter's concern. The 
requirement in Sec.  96.13(a) of these regulations that a study 
prepared by an exempted provider must be ``approved'' refers to the new 
approval requirement mandated by section 201(b)(1) of the IAA. In order 
to get this section 201(b)(1) approval by an accredited agency or 
temporarily accredited agency, Sec.  96.47(c) requires a determination 
that the home study was performed in accordance with 8 CFR 204.3(e) and 
applicable State law. Therefore, under these regulations, home studies 
must comply with any applicable State approval requirements, 8 CFR 
204.3(e), and the IAA requirement that the home study be approved by an 
accredited or temporarily accredited agency.
    4. Comment: Several commenters believe that the regulations should 
not exempt home study or child background study providers from the 
accreditation/approval process. One commenter requests that, at a 
minimum, home study and child background study providers be supervised 
providers. Some commenters support the exemption of home study and 
child background study providers from accreditation/approval.
    Response: Section 201(b)(1) of the IAA clearly exempts the 
providers of home studies and child background studies in the United 
States from accreditation/approval requirements if such providers are 
not providing any other adoption service in the case.
    There are other protections covering the completion of home studies 
and child background studies by exempted providers. The preparer of the 
home study or child background study must comply with other applicable 
Federal and State laws and regulations concerning the preparation of a 
home study or child background study. As an added measure of guidance 
and protection, the reports must be approved by an accredited agency or 
temporarily accredited agency who, under Sec.  96.47(c), must determine 
that such laws have been complied with, and that all information 
required by these regulations has been included. These protections will 
help to ensure that the home studies and child background studies 
prepared by exempted providers comply with Convention requirements, the 
IAA, and these regulations.
    5. Comment: A commenter asks whether U.S. social workers licensed 
in the United States who live abroad and perform home studies and post-
adoption services for Americans overseas need to be accredited or 
approved. If we understand the comment correctly, such U.S. social 
workers often assist individual U.S. clients and U.S. child-placing 
agencies, but the laws of the country in which they are living may 
preclude their working as an employee of a U.S. agency. Thus, such a 
social worker cannot be an employee of an accredited agency or approved 
person under these regulations.
    Response: A U.S. licensed social worker living abroad and providing 
post-adoption services and home studies will have to comply with the 
laws of the country of residence, which may preclude the social worker 
from being employed directly by an agency or person accredited or 
approved under these regulations. Such a social worker will not have to 
be independently accredited or approved under these regulations. In 
some circumstances, however, an accredited agency or approved person in 
the United States will be held responsible under these regulations for 
treating an independent overseas U.S. licensed social worker as a 
supervised provider, for example, if the social worker is asked to 
assist an accredited agency or approved person by performing home 
studies in cases involving immigration to the United States or by 
performing post-placement monitoring. If the independent overseas 
social worker is providing a home study

[[Page 8079]]

in an outgoing case, an accredited agency or approved person would also 
be able to use a home study prepared by the social worker if it 
verified the study pursuant to Sec.  96.46(c).
    6. Comment: A commenter recommends requiring that agencies or 
persons be accredited or approved if performing a home study/child 
background study and providing a child welfare service.
    Response: The proposed rule caused some confusion as to the 
circumstances in which accreditation, temporary accreditation, 
supervision, or approval will be required. Confusion is difficult to 
avoid, in part, because section 201 of the IAA both includes home 
studies and child background studies in the definition of adoption 
services covered by the accreditation/approval/supervision requirement 
and provides that preparing these studies is a service exempt from 
accreditation/approval/supervision in certain circumstances.
    The Department is changing Sec.  96.13(b) to state the rule more 
clearly. As modified, Sec.  96.13(b) states that, if an agency or 
person provides both a child welfare service and any of the adoption 
services listed in Sec.  96.2 in the United States in a Convention 
case, it must be accredited, temporarily accredited, approved or 
supervised unless the only adoption service provided is preparation of 
a home study and/or a child background study. Thus, if the agency or 
person is an exempted provider and provides a child welfare service, 
the agency or person is still an exempted provider. It will remain 
exempted from accreditation/approval even if, in addition to providing 
child welfare services it also provides a home study, child background 
study, or both.
    Otherwise the home study and child welfare services exemptions, 
explicitly required by the IAA, would have little force. On the other 
hand, if an agency or person provides an adoption service in the United 
States in addition to the child background study or home study, then 
that agency or person must be accredited, temporarily accredited, 
approved or supervised. For further clarification, the Department has 
added at Sec.  96.15 examples illustrating circumstances when providers 
must be accredited, temporarily accredited, approved, or supervised, 
and examples of when they are exempt. Examples 2 and 5 of Sec.  96.15 
specifically address the child welfare services exemption.
    To be consistent with Sec.  96.13(b), the Department has also 
modified Sec.  96.13(c) so that, if an agency or person provides both 
legal services and any adoption service defined in Sec.  96.2 in the 
United States in a Convention adoption case, it must be accredited, 
temporarily accredited, approved or supervised unless the only adoption 
service provided is preparation of a home study and/or a child 
background study.
    7. Comment: A commenter is concerned that facilitators, permitted 
to operate under some States' laws and not others, will be exempt from 
becoming accredited or approved. The commenter believes that this will 
provide unlicensed facilitators an unfair advantage by permitting them 
to provide services without adhering to State or Federal licensing 
laws.
    Response: Any agency or person that provides one of the adoption 
services defined in Sec.  96.2 in the United States must be accredited, 
temporarily accredited, approved, supervised, or an exempted provider 
under these regulations, regardless of whether or not the agency or 
person must be licensed or otherwise authorized in the State in which 
they operate. Furthermore, providers must still comply with any other 
applicable State and Federal laws.
    8. Comment: A commenter is concerned that the regulations do not 
protect parents who try to adopt independently, without the aid of an 
agency or person. The commenter believes that such parents may be 
particularly susceptible to questionable adoption practices. Also, one 
commenter thinks that parents adopting independently should not be 
exempt from the regulations. Other commenters suggest that adoptive 
parents should not have to comply with the Convention, the IAA or other 
applicable laws when acting on their own behalf.
    Response: Because section 201(b)(4) of the IAA explicitly exempts 
prospective adoptive parent(s) who are acting on their own behalf from 
any accreditation/approval requirements, Sec.  96.13(d) is retained in 
the final rule. Notwithstanding this exemption, prospective adoptive 
parent(s) acting independently must comply with the Convention, other 
applicable provisions of the IAA, and other applicable laws. Moreover, 
as provided in Sec.  96.13(d), parent(s) may act on their own behalf 
only if such action is allowed under applicable State law and the law 
of the concerned Convention country.
    9. Comment: A commenter requests that the regulations emphasize 
that ``post-adoption services,'' including reminding the prospective 
adoptive parent(s) of their need to file post-adoption reports with the 
country of origin, are not ``adoption services.''
    Response: The commenter is correct that post-adoption services--
those services provided after a child's adoption--are not adoption 
services under the IAA. The preparation of post-adoption reports and 
efforts to encourage parents to file these reports are post-adoption 
services. Agencies or persons that solely perform such types of post-
adoption services do not need to be accredited, temporarily accredited, 
approved, or supervised. The Department does not consider any change to 
the regulation to be necessary in response to this comment.
    10. Comment: One commenter notes that several foreign governments 
require adoptive parent(s) to use an agency or person for post-adoption 
reporting. The commenter states that many agencies and persons 
currently take advantage of this requirement by overcharging adoptive 
parent(s) for these services. The commenter requests that the 
Department attempt to regulate this behavior.
    Response: The preparation and filing of post-adoption reports are 
post-adoption services. The IAA does not cover such services, or 
provide a basis to regulate the fees charged for them. Nevertheless, 
Sec.  96.40(b)(7) requires an accredited agency, temporarily accredited 
agency, or approved person to disclose in writing its expected fees and 
estimated expenses for any post-placement or post-adoption reports that 
the agency or person or parent(s) must prepare in light of any 
requirements of a child's expected country of origin. The Department 
believes that this requirement will help prospective adoptive parent(s) 
to make informed choices when choosing an agency or person and will 
promote fair and ethical fee arrangements.
    11. Comment: One commenter requests that the Department draft a 
``non-interference'' regulation that prohibits agencies and persons 
from interfering in an adoption when prospective adoptive parent(s) act 
on their own behalf.
    Response: The Department does not believe that it is necessary at 
this time to include a non-interference provision, assuming that one 
germane to accreditation/approval could be crafted. If a prospective 
adoptive parent believes that an accredited agency or approved person 
is acting incompatibly with the IAA's exemption of prospective adoptive 
parent(s) acting on their own behalf from the accreditation/approval 
requirements, the complaint procedures of this rule will apply.

Section 96.14--Providing Adoption Services Using Other Providers

    1. Comment: Several commenters are concerned about the relationship 
between a primary provider and entities accredited by Convention 
countries

[[Page 8080]]

(foreign accredited providers). Many want the regulations to reach as 
many types of providers who operate overseas as possible, while others 
stress that U.S. agencies and persons are not able to control or 
oversee the conduct of foreign providers. Some commenters want primary 
providers to be responsible for supervising the actions of every agency 
or person they use overseas, but others support the proposed rule, 
under which primary providers were not responsible for supervising 
foreign accredited providers.
    Response: The issue of who a primary provider must treat as under 
its supervision and responsibility is clearly one on which reasonable 
people differ.
    As explained at section III, subsection A of the preamble, above, 
the Department has modified Sec. Sec.  96.14(c) and (d) to require that 
providers accredited by the Convention country, in addition to 
providers that are unregulated by the Convention country, be treated as 
foreign supervised providers, unless they are performing a service 
qualifying for verification under Sec.  96.46(c). A primary provider 
will therefore need to exercise care in selecting foreign supervised 
providers, and will need to oversee their work; it may lose its status 
as an accredited agency or approved person if it fails to ensure that 
its use of foreign supervised providers meets the relevant standards in 
Sec.  96.46.
    This change in the regulations is consistent with the Department's 
view--made express in new Sec.  96.12(c)--that accreditation is not a 
guarantee of good behavior. It also underscores the importance of U.S. 
agencies or persons working with ethical providers in other countries 
in order to ensure that all Convention adoptions comply with Convention 
standards. The final rule means that primary providers cannot ignore 
questionable practices simply because they are committed by a foreign 
provider that has been accredited. While the exception for services 
qualifying for verification acknowledges that U.S. agencies and persons 
may not be well positioned to supervise the providers of such services, 
the after-the-fact verification requirement will require the U.S. 
agency or person acting as the primary provider to take appropriate 
steps to ensure that the requirements of the Convention and local law 
have been met.
    2. Comment: Some commenters state that primary providers should be 
fully responsible for all ``agents'' and individuals that assist them 
in the country of origin.
    Response: Under the IAA and this rule, whether a primary provider 
must supervise an ``agent'' or other individual in a Convention country 
does not turn on what the provider is called. Section 96.14 requires 
that a primary provider adhere to the standards of Sec.  96.46 when 
using any foreign non-governmental provider, and Sec.  96.2 now makes 
clear that ``agents'' and other foreign entities are included in the 
definition of supervised provider. These modifications to the 
regulations are sufficient to address this comment.
    3. Comment: One commenter notes a Connecticut case in which the 
court refused to award a State subsidy to an adoptive parent--
presumably located in Connecticut--because the entity that ``placed'' 
the child was not licensed in Connecticut, and suggests that the 
Department address the interpretation of State statutes regarding the 
award of post-adoption subsidies through these regulations.
    Response: The Department infers that the commenter believes that 
the Department could affect when State subsidies are available by 
including in the regulation a provision regarding, for example, whether 
a primary provider or a supervised provider will be considered to have 
``placed'' a child for adoption, or where an adoption service provider 
will be deemed to be located, if multiple providers are involved in a 
Convention adoption. The Department does not agree that this issue can 
or should be addressed in these regulations.
    4. Comment: A commenter requests that the Department change Sec.  
96.14(b)(2) because, as written, it appears that home studies performed 
by an exempted provider must be approved by any accredited agency, but 
not specifically by the primary provider. Other commenters suggest 
primary providers could be reluctant to accept home studies from 
exempted providers that they themselves did not approve.
    Response: The Department is not making the change suggested because 
the Department believes that the regulation, as written, is consistent 
with the IAA, section 201(b)(1), which requires only that a home study 
prepared by an exempted provider be reviewed and approved by an 
accredited agency. We do not believe it is necessary to require further 
that the accredited or temporarily accredited agency approving the home 
study be the primary provider in the Convention case, and do not 
believe that this provision will deter primary providers from accepting 
home studies from exempted providers. While the primary provider must 
supervise and be responsible for the supervised providers with which it 
works, primary providers may need the flexibility to accept home 
studies prepared by exempted providers that have been approved by other 
accredited or temporarily accredited agencies (for example those 
located in other States) to complete Convention adoptions. Otherwise, 
primary providers could find it difficult to work with out-of-State 
prospective adoptive parent(s).
    5. Comment: A commenter is concerned that small agencies will have 
trouble finding work as supervised providers because large accredited 
agencies will attempt to curb competition by performing all services in 
a case on their own, and recommends that, in lieu of having primary 
providers supervise other agencies, the Department step into the role 
of supervisor of the provision of adoption services by smaller 
agencies.
    Response: It would be incompatible with the IAA's scheme for 
Convention implementation for the Department to take on a direct role 
in supervising the provision of adoption services, and we therefore 
decline to make any change in response to this comment. As well, we 
note that temporary accreditation, under section 203(c) of the IAA, is 
meant to address this commenter's concerns, by providing a mechanism to 
allow small agencies to continue to operate independently of larger 
agencies, while giving the small agencies a longer period of time to 
gather the information and resources necessary to achieve full 
accreditation. Moreover, while we cannot fully predict at this time the 
public demand for provision of adoption services in Convention cases, 
we believe that it is unlikely that accredited agencies or approved 
persons will have the resources to take over providing all of the 
adoption services that are currently handled by small agencies or 
persons. Also, when working with out-of-state clients, accredited 
agencies and approved persons will likely need supervised providers to 
provide adoption services in States where they are not licensed. Thus, 
the Department anticipates that small agencies and persons will 
continue to be able to provide services in Convention adoptions.
    6. Comment: One commenter requests that the Department specifically 
outline what services require an agency or person to be accredited or 
approved.
    Response: Only an agency or person providing adoption services, as 
defined in the IAA and in Sec.  96.2, in a Convention adoption in the 
United States is required to be accredited or approved. An agency or 
person may avoid accreditation or approval if it provides Convention 
adoption services

[[Page 8081]]

solely as a supervised provider or exempted provider. Section 96.15 
provides examples of circumstances in which an adoption service 
provider will be required to be accredited, temporarily accredited, or 
approved or to operate as a supervised provider or exempted provider.

Section 96.16--Public Domestic Authorities

    Comment: The Department received a comment stating that it should 
require public domestic authorities providing adoption services to 
become accredited just like private entities, because it is 
``hypocritical'' for the U.S. Government to have one set of rules for 
private agencies and a different set for public domestic authorities.
    Response: While initial draft versions of the IAA did not exclude 
government agencies from the category of persons to be accredited or 
approved, (S. 682, 106th Cong. 1st Sess. (1999) and H.R. 2342, 106th 
Cong. 1st Sess. (1999)), sections 3(14) and 201(a) of the IAA as 
enacted, taken together, provide that persons to be accredited/approved 
shall not include an agency of government or tribal government entity, 
thereby excluding public domestic authorities from the accreditation 
and approval requirement. The Department understands this to exclude 
all State, local and tribal government entities--an approach that is 
consistent with the concerns of the Convention's drafters about abuses 
by private entities and that avoids placing the Federal government in 
the role of regulating State and local governments unnecessarily. (See 
the Notice of Proposed Rulemaking at 68 FR 54079 for further discussion 
of this issue.)

Section 96.17--Effective Date of Accreditation and Approval 
Requirements

    Comment: A commenter asks what will happen to an agency that has 
not completed the accreditation process when the Convention enters into 
force.
    Response: Once the Convention enters into force for the United 
States, any agency or person providing adoption services in connection 
with a Convention adoption in the United States will need to be 
accredited, temporarily accredited, approved, supervised, or be an 
exempted provider. The rule has a special timetable for the initial 
round of accreditation/approvals, which is discussed in the section-by-
section responses for subpart D.

Subpart D--Application Procedures for Accreditation and Approval

    Subpart D is organized in the same way as in the proposed rule, and 
includes Sec.  96.18 (Scope); Sec.  96.19 (Special provision for 
agencies and persons seeking to be accredited or approved as of the 
time the Convention enters into force for the United States); Sec.  
96.20 (First-time application procedures for accreditation and 
approval); Sec.  96.21 (Choosing an accrediting entity); and Sec.  
96.22 (Reserved).
    As discussed below, the Department has made no changes to this 
subpart in response to public comment. It has made minor technical and 
conforming changes, however.

Section 96.19--Special Provision for Agencies and Persons Seeking To Be 
Accredited or Approved at the Time the Convention Enters Into Force for 
the United States

    Comment: Commenters support the transitional application deadline 
(TAD) and deadline for initial accreditation or approval (DIAA) 
process. Some request that the regulations more clearly outline the 
process for those who obtain accreditation after the Convention has 
entered into force. Another commenter suggests that any agency or 
person that has applied for full accreditation during the initial 
accreditation/approval timeframe, but that has not been processed by an 
accrediting entity through no fault of its own, should be granted 
temporary accreditation.
    Response: We are not modifying the rule to allow temporary 
accreditation to be granted to an applicant for full accreditation that 
has not been accredited by the DIAA. The IAA specifically limits 
temporary accreditation to small agencies, as defined in section 203(c) 
of the IAA. The Department recognizes, however, that a large volume of 
applications may make it difficult for accrediting entities to complete 
accreditations and approvals in an expedited fashion. For this reason, 
Sec.  96.19 establishes that a TAD will be published before the final 
DIAA. After the Department learns the number of agencies and persons 
that applied by the TAD, and has an estimate of how long it will take 
the accrediting entities to evaluate each applicant (including 
conducting necessary site visits), it will announce the DIAA. The DIAA 
will be the date by which an agency or person must complete the 
accreditation or approval process so as to be accredited or approved 
when the Convention enters into force for the United States. Since the 
DIAA will be set after the Department and the accrediting entities have 
a better idea of how long it will take the accrediting entities to do 
their job, all agencies and persons who applied by the TAD should have 
a reasonable opportunity to have their applications for accreditation 
or approval reviewed by the DIAA. The process for applying for 
accreditation/approval after the Convention has entered into force is 
already described in Sec.  96.20.

Section 96.20--First-Time Application Procedures for Accreditation and 
Approval

    Comment: A commenter believes that the regulations should specify 
the length of time an accrediting entity has to evaluate an applicant 
for accreditation or approval, and suggests 90 days.
    Response: While the Department wants to ensure that applications 
for accreditation and approval are reviewed as quickly as possible, it 
is not establishing a deadline by which accrediting entities will have 
to complete their work. Variables like the number of agencies and 
persons that will apply, and the number and capacity of the accrediting 
entities, require that the time frame remain flexible. In addition, 
Sec.  96.24(d) authorizes accrediting entities to give agencies and 
persons an opportunity to cure deficiencies before denying an 
application for accreditation or approval. If the Department imposed a 
90-day limit on completion of accreditation and approval decisions, 
accrediting entities could be forced to deny applications in 
circumstances where an agency or person had not yet cured any 
identified deficiencies within 90 days. We believe agencies and persons 
will benefit from an accreditation and approval process that retains 
some flexibility.

Section 96.21--Choosing an Accrediting Entity

    Comment: Some commenters recommend that applicants for 
accreditation and approval be allowed to apply to any designated 
accrediting entity, regardless of geographical location. Other 
commenters ask that the regulations clarify the accrediting entity to 
which an agency or person that is licensed in more than one State 
should apply for accreditation or approval.
    Response: Section 96.21(a) states that an agency or person applying 
for accreditation or approval may apply to any accrediting entity with 
jurisdiction over its application. The criteria to determine the 
accrediting entities' jurisdiction will be set out in the

[[Page 8082]]

agreements between the Department and each accrediting entity. These 
agreements will be published in the Federal Register. The agreements 
between the Department and any accrediting entity that is a State 
licensing authority will have geographical limitations on its 
jurisdiction that are consistent with section 202(a)(2)(B)(ii) of the 
IAA, which states that public entities designated as accrediting 
entities will be permitted to accredit ``only agencies located in the 
State in which the public entity is located.''

Subpart E--Evaluation of Applicants for Accreditation and Approval

    Subpart E is organized in the same way as in the proposed rule, and 
includes Sec.  96.23 (Scope); Sec.  96.24 (Procedures for evaluating 
applicants for accreditation or approval); Sec.  96.25 (Access to 
information and documents requested by the accrediting entity); Sec.  
96.26 (Protection of information and documents by the accrediting 
agency); Sec.  96.27 (Substantive criteria for evaluating applicants 
for accreditation or approval), and Sec.  96.28 (Reserved).
    The Department has made a number of changes in response to public 
comments, including to Sec.  96.24, Sec.  96.25, Sec.  96.26, and Sec.  
96.27, which are discussed below.

Section 96.24--Procedures for Evaluating Applicants for Accreditation 
or Approval

    1. Comment: Several commenters request that the Department address 
whether agencies that have undergone voluntary accreditation, as 
offered by the Council on Accreditation (COA), will have any ``deemed 
status.'' Similarly, several commenters request that, if an agency or 
person is already voluntarily accredited, then the accrediting entity 
recognize automatically compliance with certain subpart F standards 
that they believe are duplicative of the standards under which they 
were voluntarily accredited. Some voluntarily accredited small agencies 
contend that they cannot afford a second accreditation.
    Response: The Department will not allow agencies or persons that 
have undergone a voluntary accreditation process to have ``deemed'' 
Convention accreditation or approval status. The Department 
acknowledges that some standards of subpart F overlap with the COA 
voluntary accreditation standards, however, there are many standards in 
subpart F that do not overlap. We do not believe that COA voluntary 
accreditation is a substitute for ensuring that all agencies meet the 
specific standards on intercountry adoption practices that are derived 
from the Convention and the IAA and set forth in subpart F. For 
example, Sec.  96.33(b) requires an agency's or person's finances to be 
subject to independent audits every four years. COA standard G6.5.02 
does not require any audit of an organization that annually reports 
revenues less than $500,000. Similarly, Sec.  96.34(a) prohibits an 
agency or person from compensating any individual providing 
intercountry adoption services on a contingent fee basis, and Sec.  
96.34(b) prohibits an agency or person from compensating its directors, 
officers, employees or supervised providers on a contingent fee basis. 
COA standards have no explicit prohibition against contingent fees. The 
regulation in Sec.  96.35(b) also contains requirements that are not in 
COA standards. The COA standards are focused on overall organizational 
integrity and ensuring best child welfare practices. The Department's 
standards are instead focused on implementing specific provisions of 
the IAA and ensuring that agencies and persons can perform Convention 
tasks. Finally, considerations of equity and timeliness counsel against 
allowing a COA voluntary accreditation to substitute, in whole or in 
part, for accreditation under these regulations--equity vis-[aacute]-
vis agencies and persons who have not participated in COA's voluntary 
program and timeliness to the extent that accreditation under these 
regulations will be based on information to be collected in the future 
and closer to time to entry into force.
    2. Comment: Several commenters ask that agencies and persons that 
have a State license become automatically accredited. Other commenters 
seek deeming of State licensing authorities' standards.
    Response: The IAA does not authorize the Department to substitute 
licensure by a State for accreditation/approval under the Federal 
scheme created by the IAA. The Convention and the IAA mandate many 
specific duties for agencies and persons, including reporting duties, 
which are not part of current State licensing. In addition, because 
licensing requirements vary between States, allowing ``deeming'' would 
be at odds with the IAA's goal of uniform interpretation and 
implementation of the Convention, IAA section 2(a)(2), and might lead 
to disparities between agencies and persons, depending on their 
location. Thus, the fact that an agency or person is licensed or 
authorized by State licensing authorities is only one factor to 
consider in determining whether it can be accredited or approved.
    3. Comment: A commenter notes that the nonprofit charitable 
organization she works with cannot place children with adoptive parents 
because it has just received State licensure as a child-placing agency, 
and the authorities in the foreign country in which it works require a 
child-placing agency to have been licensed at least four years before 
it is allowed to place children. The commenter expresses hope that the 
Department will be able to resolve the issue of differing standards in 
different countries in this rule, and welcome new agencies into the 
Convention system.
    Response: The Department welcomes all agencies and persons, both 
new and old, to apply for accreditation or approval. The Department 
hopes that birth parents and prospective adoptive parent(s) will be 
able to select a provider from a broad and geographically diverse pool 
of accredited agencies and approved persons to help them with 
Convention adoptions. Article 12 of the Convention, however, states 
that an agency that is accredited in one Convention country may provide 
services in another Convention country only if it has been authorized 
to do so by the authorities of both countries. Thus, the United States 
cannot, in this rule, ensure that U.S. accredited agencies and approved 
persons will be entitled to work in all Convention countries. The 
Department expects, however, that because the standards for U.S. 
accreditation and approval will be stringent and comprehensive, 
Convention countries may be willing to accept U.S. accreditation or 
approval, without requiring further accreditation or approval.
    4. Comment: One commenter notes that the proposed regulation would 
require evaluators to have experience in intercountry adoption or the 
evaluation of compliance with standards. While the commenter believes 
it would be preferable to require experience with both, because it 
expects that any entity designated as an accrediting entity would 
receive an initial flood of accreditation/approval applications, it 
requests that Sec.  96.24(a) be revised to allow the use of a wider 
pool of evaluators who do not have intercountry adoption experience in 
order to complete accreditation/approval on a timely basis. Another 
commenter would like the regulation to specify that at least one 
evaluator participating in site visits must have experience with 
intercountry adoption.
    Response: The Department has expanded the qualifications for

[[Page 8083]]

evaluators in Sec.  96.24(a). Those qualifications now include: (1) 
Expertise in intercountry adoption; (2) expertise in standards 
evaluation; or (3) experience with the management or oversight of a 
child welfare organization. The Department believes that permitting 
evaluators to meet any of these three qualifications will ensure that 
accrediting entities perform high-quality evaluations of agencies and 
persons, while leaving them flexibility to find enough qualified site 
evaluators. To preserve flexibility, we are not mandating that the 
visiting site evaluator be the one with the intercountry adoption 
experience.
    5. Comment: Some commenters are concerned that the accrediting 
entities will not consider complaints when evaluating agencies and 
persons.
    Response: We have added a provision to Sec.  96.24(b) to require 
that accrediting entities consider complaints referred to them under 
subpart J of this rule when reviewing an agency's or person's 
accreditation or approval status.
    6. Comment: A commenter asks whether an agency seeking 
accreditation must cover the cost of any off-site interviews with 
individuals (e.g., clients who have moved to a different city from the 
agency).
    Response: Pursuant to Sec.  96.8(b)(2), agencies and persons will 
pay a nonrefundable fee for full accreditation or approval that is set 
to include ``the costs of all activities associated with the 
accreditation or approval cycle, including but not limited to, costs 
for completing the accreditation or approval process * * * except that 
separate fees based on actual costs incurred may be charged for the 
travel and maintenance of evaluators.'' Thus, an agency or person can 
be expected to cover the cost of doing any off-site interviews, whether 
the cost is incorporated fully into the accreditation or approval fee 
or recovered in part through fees for travel costs incurred by 
evaluators to do off-site interviews.
    The fee arrangement is different for those agencies seeking 
temporary accreditation, but the net result is the same with respect to 
off-site interviews. The accrediting entity will charge a non-
refundable fee for temporary accreditation that will not include the 
costs of site visits, whether on-or off-site, because a site visit is 
not mandatory to receive temporary accreditation. If the accrediting 
entity decides a site visit is necessary to determine whether to 
approve an application for temporary accreditation, the accrediting 
entity will assess additional fees to the agency for the costs of a 
site visit, including any costs for off-site interviews.
    7. Comment: A commenter requests the following revision to Sec.  
96.24(d) to make notice of deficiencies to a candidate for 
accreditation or approval mandatory: ``Before deciding whether to 
accredit an agency or approve a person, the accrediting entity shall 
advise the agency or person of any deficiencies that may hinder or 
prevent its accreditation or approval and defer a decision to allow the 
agency or person to correct the deficiencies.''
    Response: The Department has not changed the language of the 
proposed rule. Section 96.24(d) already permits an accrediting entity 
discretion to give an agency or person advance notice of and an 
opportunity to cure any deficiencies that may hinder or prevent its 
accreditation or approval. The accrediting entities are being chosen 
based on their expertise and experience with accreditation and/or 
licensing of adoption service providers, and the rule defers to that 
expertise by giving them discretion to judge whether it would be 
constructive to give notice and an opportunity to cure deficiencies 
before any specific denial.
    8. Comment: One commenter notes that Sec.  96.24(c) provides for 
persons with knowledge of an agency's or person's work to comment on an 
application for accreditation or approval, but that the Department has 
not provided a mechanism for making such comments. The commenter states 
that knowledgeable individuals have no way of knowing whether an agency 
or person has filed for accreditation or approval.
    Response: This issue is not addressed fully in the regulation, but 
will be further addressed in the agreements with the accrediting 
entities. Pursuant to Sec.  96.91(b)(1), once the Convention has 
entered into force, individuals who wish to comment on an agency's or 
person's application for accreditation or approval may ask an 
accrediting entity to confirm whether that agency or person has a 
pending application for accreditation or approval. The Department 
intends, in its agreements with the accrediting entities, to require 
that the accrediting entities also make available to the public 
information related to agencies and persons that apply to be accredited 
or approved by the date of entry into force. We also intend to address 
in the agreements with the accrediting entities the mechanism by which 
the public can communicate to the accrediting entity comments on 
initial applications for accreditation or approval. The agreements will 
be published in the Federal Register.

Section 96.25--Access to Information and Documents Requested by the 
Accrediting Entity

    1. Comment: Several commenters ask the Department to clarify 
whether accrediting entities are allowed access to information and 
documents belonging to an agency or person regarding non-Convention 
cases. These commenters request that the Department specifically limit 
the accrediting entity's access to information and documents to 
Convention adoption cases only.
    Response: The Department has modified this section to clarify that, 
with the exception of first-time applicants for accreditation or 
approval, agencies and persons are only required to give accrediting 
entities access to adoption case files related to Convention adoptions. 
Thus, if an agency seeking renewal of accreditation provides adoption 
services relating to both children from a Convention country and 
children from a non-Convention country, the agency or person would have 
to give the accrediting entity access to any adoption case files 
relating to intercountry adoptions with the Convention country, but not 
to the files relating solely to its intercountry adoptions from the 
non-Convention country. The exception to this rule, which now appears 
at Sec.  96.25(b), is that the accrediting entity may review case files 
of non-Convention adoption cases for the purpose of assessing a first-
time applicant's capacity to comply with the record-keeping and data-
management standards in subpart F. We make this exception so that 
accrediting entities have the option of reviewing adoption case files 
of a first-time applicant if they are concerned about the applicant's 
record-keeping capabilities, since the applicant will not have any 
Convention case files to be reviewed. Section 96.25(b) makes it clear 
that, if such review is requested by an accrediting entity, the agency 
or person may withhold names and other information that identifies 
birth parent(s), prospective adoptive parent(s), and adoptee(s) from 
such non-Convention adoption case files to protect the privacy of those 
individuals.
    The general rule prohibiting review of non-Convention adoption case 
files does not apply with respect to documents and information, such as 
policy guidelines, that relate to both Convention and non-Convention 
adoptions. The accrediting entity must be given access to such 
documents and information. For example, accrediting entities will be 
allowed to look at documents relating to an agency's or

[[Page 8084]]

person's finances and corporate governance, which relate to both 
Convention and non-Convention adoption activities.
    2. Comment: A commenter suggests that the Department amend Sec.  
96.25(a) so that it reads: ``The agency or person must give the 
accrediting entity access to all information and documents * * * that 
it requests [instead of ``requires''] to evaluate an agency or 
person,'' in order to remove any argument that the accrediting entity 
would be required to justify why access to certain documents or 
information was necessary to the accreditation process.
    Response: The Department has modified Sec.  96.25(a) so that it 
states that an agency or person must give the accrediting entity access 
to information and documents ``that it requires or requests'' to 
evaluate an agency or person for accreditation or approval. This should 
make it clear (subject to the general rule prohibiting review of non-
Convention adoption case files) both that the agency or person must 
give the accrediting entity the information and documents it needs, 
even if not requested by the accrediting entity, and that the agency or 
person must give the accrediting entity what the accrediting entity 
requests, without challenging whether the accrediting entity needs the 
information and documents.

Section 96.26--Protection of Information and Documents by the 
Accrediting Entity

    1. Comment: Several commenters request that all documents used by 
an accrediting entity in the accreditation process be made available to 
the public, subject only to existing Federal, State, and local laws. 
They suggest that the documents could help prospective adoptive 
families choose which agency or person to use for adoption services. 
Commenters also request that an agency's or person's list of supervised 
providers (particularly foreign supervised providers) be public 
information. These commenters want Sec.  96.26(a), which sets limits on 
disclosure of information procured by the accrediting entity, to be 
deleted. Other commenters recommend that the Department maintain Sec.  
96.26(a) as it is written. They believe that confidentiality is 
essential to facilitating an open relationship between accrediting 
entities and agencies and persons seeking accreditation/approval. Some 
commenters think subpart M appropriately specifies the types of 
information that should be provided to the public. One State licensing 
authority requests that the Department elaborate on the interplay 
between the Freedom of Information Act (FOIA), 5 U.S.C. 552 and Sec.  
96.26, because it believes Sec.  96.26 conflicts with the FOIA.
    Response: We have made a few changes to Sec.  96.26(a). Section 
96.26(a) continues to require accrediting entities to protect from 
unauthorized use and disclosure all documents and information the 
accrediting entity may collect while doing its job of evaluating an 
agency or person, such as self studies, internal policies, corporate 
financial data, and background information on individual employees. We 
are not deleting the basic rule of confidentiality, because we believe 
it is appropriate when agencies and persons are being asked to disclose 
internal business information.
    In order to clarify in what circumstances information may be 
disclosed, and to reinforce that the confidentiality rule does not 
prohibit disclosures otherwise required under State or Federal law, we 
have moved and revised language from Sec.  96.26(a) to a new Sec.  
96.26(b). Section Sec.  96.26(b) now contains the general prohibition 
on disclosure of such documents and information to the public, and sets 
out the circumstances in which it is appropriate to release 
information. In particular, Sec.  96.26(b)(2) now includes new language 
making it clear that the accrediting entity may not withhold 
information, including an agency's or person's internal documents, if 
otherwise required to release it under State or Federal law. We note 
that Sec.  96.26 of the final rule cannot conflict with the FOIA or 
similar State laws because the prohibitions against disclosure in Sec.  
96.26(b)(2) do not apply if disclosure is otherwise required under 
Federal or State laws. Thus, if the FOIA or other information 
disclosure laws apply, accrediting entities must comply with those 
laws.
    2. Comment: A commenter requests that the Department delete the 
first sentence of Sec.  96.26(b) (now Sec.  96.26(c)), which allows 
agencies and persons to provide documents in which individually 
assigned codes have been substituted for personal identifying 
information, because it believes monitoring the actual practices of an 
agency or person requires a comprehensive list identifying all clients, 
including prospective adoptive parent(s) and birth parent(s), and 
because it believes the provision is unnecessary because the remainder 
of the provision already imposes a duty of confidentiality on the 
accrediting entity.
    Response: The Department has to balance the need of accrediting 
entities to obtain information on the practices of accredited agencies 
and approved persons against the need to protect the privacy of 
individual participants in the adoption process. The Department 
believes that this provision, now Sec.  96.26(c), strikes the right 
balance between these competing interests by giving accrediting 
entities the authority to request information that identifies birth 
parents, prospective adoptive parent(s), and adoptees if they have an 
articulated need for that information, but not requiring the automatic 
disclosure of all such information, and thus it has made no changes in 
response to this comment.

Section 96.27--Substantive Criteria for Evaluating Applicants for 
Accreditation or Approval

    1. Comment: Several commenters suggest that using a point system 
for evaluating compliance with standards will be too subjective. Many 
also believe that a substantial compliance system is too vaguely 
defined in the regulations. Some request that the regulations specify 
how different standards will be weighted. Other commenters commend the 
Department for allowing accrediting entities to develop a substantial 
compliance system and express support for the rule as written. Some 
commenters request that the Department submit any substantial 
compliance procedures to notice and comment rulemaking. Other 
commenters recommend that any system prevent an agency or person from 
achieving accreditation or approval if it does not meet all minimum 
requirements in section 203(b)(1)(A)-(F) of the IAA.
    Response: The Department did not think it was advisable to include 
a methodology for measuring substantial compliance in the rule, and 
continues to be of that view. The accrediting entities, who will be 
using the methodology and who will have more experience than the 
Department in administering standards, should take the lead in 
preparing the procedures for measuring substantial compliance.
    We have, however, revised Sec.  96.27(d) to clarify that the 
Department will retain oversight over the development and use of 
substantial compliance procedures by the accrediting entity, ensuring 
that each accrediting entity only uses a method approved by the 
Department, and that each method is substantially the same as all other 
approved methods. In accordance with the rule, once an accrediting 
entity is selected, the entity must develop a method of evaluating 
compliance. Each such method will include: an assigned value for each 
standard or element of a standard; a method of rating compliance with 
each standard; and a method of evaluating an

[[Page 8085]]

agency's or person's overall compliance with all of the applicable 
standards. The Department must then approve each accrediting entity's 
method for ascertaining substantial compliance, ensuring that the value 
assigned to each standard reflects the Convention and the IAA and is 
consistent with the value assigned to the standard by other accrediting 
entities. The weighting of particular standards will be based on the 
priorities set in the Convention and the IAA (including the core 
standards in IAA section 203(b)(1)(A)-(F)).
    The Department does not agree that substantial compliance 
procedures, when developed, must or should be subject to Administrative 
Procedure Act rulemaking procedures. The final rule, like the proposed 
rule, instead requires that accrediting entities advise applicants of 
the value assigned to the standards or elements of the standards at the 
time they provide applicants with the application materials. This 
notice and the Department's oversight of the development of the 
procedures for measuring substantial compliance will ensure that 
agencies and persons are informed about the procedures before seeking 
accreditation or approval, and that the procedures reflect the 
objectives of the Convention and the IAA.
    2. Comment: Several commenters do not agree with the use of a 
substantial compliance system. They request that the regulations 
require complete compliance with all the standards of subpart F. Many 
other commenters express their support for a substantial compliance 
model. Some are concerned that the accrediting entities will require 
compliance with standards not contained in subpart F.
    Response: There has been considerable disagreement in the adoption 
community about which of the standards in subpart F--if any--should be 
made absolute. The preamble to the proposed rule discussed this issue 
extensively. (See 68 FR 54080). The IAA plainly contemplates a 
substantial compliance standard, however, as section 204(b)(1) of the 
IAA requires the Department to suspend or cancel the accreditation or 
approval of an agency or person who is ``substantially out of 
compliance with applicable requirements,'' if the accrediting entity 
has not taken appropriate enforcement action. In addition, the 
standards in Part F address a wide range of ethical and social work and 
adoption issues and reflect practices that inherently are evolving. 
One-time failures to comply with a particular standard, though 
unfortunate, should not necessarily lead to the imposition of severe 
types of adverse action such as cancellation of accreditation or 
approval. The Department considers it essential to give sufficient 
discretion to accrediting entities, which will be selected based on 
their expertise, to decide when noncompliance warrants adverse action, 
and which kind of adverse action to take.
    The Department recognizes that adherence to certain individual 
standards is critical to protecting children and families and 
comporting with the requirements of the Convention and the IAA. 
Therefore, as noted in the response to comment 1 for this section, the 
accrediting entity is required to develop and use a method for 
measuring substantial compliance which includes assigning values and 
weighting each individual standard, or element of a standard, 
reflecting the relative importance of each standard to compliance with 
the Convention and IAA. The accrediting entity may not use standards 
other than those contained in this rule.
    3. Comment: Several commenters believe that the accreditation 
process described in Sec.  96.27 focuses too heavily on document 
review. They would like the regulations to emphasize analysis of an 
agency's or person's past performance, including successful adoptions, 
disruptions and dissolutions, complaints, and pending or resolved 
lawsuits, as the primary criteria for accreditation. Some commenters 
suggest that the primary basis of evaluation for accreditation should 
be interviews of clients chosen on a random basis, as well as 
interviews with former employees, agents, and consultants. One 
commenter suggests that a provider should be required to waive any 
confidentiality requirements contained in settlements of lawsuits. Some 
commenters would like agencies to give accrediting entities a list of 
all their clients and former clients to aid in the evaluation.
    Response: We believe the overall process outlined in the rule for 
evaluating agencies and persons and determining substantial compliance 
is consistent with the IAA's accreditation model. It is worth noting 
that accrediting entities will not initially be able to monitor actual 
performance of agencies in completing Convention adoptions because the 
Convention will not enter into force for the United States until after 
some agencies and persons have been accredited and approved. Therefore, 
during the initial accreditation process a certain amount of document 
review is necessary to measure an agency's or person's capacity to meet 
the standards once the Convention is in force. The rule takes this into 
account in Sec.  96.27(b). The rule also requires, however, in Sec.  
96.24(b) that accrediting entities conduct site visits for each agency 
or person seeking accreditation or approval. As provided in Sec.  
96.24(c), these site visits may include ``interviews with birth 
parents, adoptive parent(s), prospective adoptive parent(s), and adult 
adoptee(s) served by the agency or person, and interviews with other 
individuals knowledgeable about the agency's or person's provision of 
adoption services.'' Thus, we do not agree that the evaluation process 
focuses too much on document review.
    In addition, Sec.  96.24(b) has been revised to require 
consideration of complaints received under subpart J; Sec.  96.27(b) 
requires that past performance generally be considered in determining 
if an agency or person may retain or renew its accreditation or 
approval to complete Convention adoptions; and other standards in 
subpart F, in particular Sec.  96.35, require the disclosure to the 
accrediting entity of much of the information these commenters wish to 
have the accrediting entity consider. Please see the discussion of 
comments on Sec.  96.35's disclosure provisions, including disclosures 
related to lawsuits, complaints, and disciplinary proceedings for 
further explanation.
    4. Comment: A State licensing authority commends the Department for 
explaining, in Sec.  96.27(g), that the accreditation standards under 
these regulations do not eliminate the need for an agency or person to 
comply fully with the laws of the State in which it operates. The 
commenter suggests two modifications to enhance a close working 
relationship between accrediting entities and State licensing 
authorities that are not accrediting entities. First, it recommends 
that the Department require the accrediting entities to consult with 
State licensing authorities to verify that applicants for accreditation 
or renewal of accreditation are in compliance with State licensing 
requirements. Secondly, it recommends that the Department specifically 
allow accrediting entities and State licensing authorities to share 
information with each other pursuant to the access to information 
provisions of Sec.  96.26.
    Response: The Department encourages open communication between 
accrediting entities and State licensing authorities and has revised 
the language of Sec.  96.26(b) to clarify that sharing information with 
an appropriate public domestic authority, such as a State licensing 
authority, is authorized.

[[Page 8086]]

Subpart F--Standards for Convention Accreditation and Approval

    Subpart F is organized in the same way as in the proposed rule with 
informal ``divisions'' after the first section, Sec.  96.29 (Scope). 
The Licensing and Corporate Governance division includes Sec.  96.30 
(State licensing); Sec.  96.31 (Corporate structure); and Sec.  96.32 
(Internal structure and oversight). The Financial and Risk Management 
division includes Sec.  96.33 (Budget, audit, insurance, and risk 
assessment requirements) and Sec.  96.34 (Compensation). The Ethical 
Practices and Responsibilities division includes Sec.  96.35 
(Suitability of agencies and persons to provide adoption services 
consistent with the Convention) and Sec.  96.36 (Prohibition on child 
buying). The Professional Qualifications and Training for Employees 
division includes Sec.  96.37 (Education and experience requirements 
for social service personnel) and Sec.  96.38 (Training requirements 
for social service personnel). The Information Disclosure, Fee 
Practices and Quality Control Policies and Practices division includes 
Sec.  96.39 (Information disclosure and quality control practices) and 
Sec.  96.40 (Fee policies and procedures). The division on Responding 
to Complaints and Records and Reports Management includes Sec.  96.41 
(Procedures for responding to complaints and improving service 
delivery); Sec.  96.42 (Retention, preservation and disclosure of 
adoption records); and Sec.  96.43 (Case tracking, data management, and 
reporting). The Service Planning and Delivery division includes Sec.  
96.44 (Acting as a primary provider); Sec.  96.45 (Using supervised 
providers in the United States); and Sec.  96.46 (Using providers in 
Convention countries). The division on Standards for Cases in Which a 
Child Is Immigrating to the United States (Incoming Cases) includes 
Sec.  96.47 (Preparation of home studies in incoming cases); Sec.  
96.48 (Preparation and training of prospective adoptive parent(s) in 
incoming cases); Sec.  96.49 (Provision of medical and social 
information in incoming cases); Sec.  96.50 (Placement and post-
placement monitoring until final adoption in incoming cases); Sec.  
96.51 (Post-adoption services in incoming cases); and Sec.  96.52 
(Performance of Hague Convention communication and coordination 
functions in incoming cases). The division on Standards for Cases in 
Which a Child Is Emigrating From the United States (Outgoing Cases) 
includes Sec.  96.53 (Background studies on the child and consents in 
outgoing cases); Sec.  96.54 (Placement standards in outgoing cases); 
Sec.  96.55 (Performance of Hague Convention communication and 
coordination functions in outgoing cases); and Sec.  96.56 (Reserved).
    The Department has made a number of changes to subpart F in 
response to public comments. In particular, as discussed at section 
III, subsection B of the preamble, revisions have been made to Sec.  
96.33's insurance standard, to Sec.  96.37 on social service personnel 
education and experience, to Sec.  96.39's provision on waivers of 
liability, and to the provisions relating to primary provider 
responsibility for supervised providers in the United States and for 
foreign providers in Convention countries Sec. Sec.  96.45-46. Comments 
on these provisions, and changes to a number of others, such as 
Sec. Sec.  96.32, 96.34, 96.35, 96.38-44, and 96.47-54, are discussed 
below. We also changed the sections on preparation of home studies in 
incoming cases (Sec.  96.47) and child background studies in outgoing 
cases (Sec.  96.53) to clarify that, under the IAA, a supervised 
provider may prepare a home study or child background study.

Licensing and Corporate Governance

Section 96.30--State Licensing

    1. Comment: Several commenters recommend revising Sec.  96.30(c) to 
state that agencies or persons work ``in cooperation with'' instead of 
``through'' other agencies and persons licensed in different States. 
They believe this will clarify the fact that agencies are not limited 
to working only with families in the State(s) in which the agency is 
licensed. Conversely, a commenter requests that the regulations state 
that, once an agency is accredited to provide Convention adoption 
services, it is authorized to provide those services in any U.S. State 
where it is also licensed under State law. Another commenter believes 
that a different license should be involved in intercountry placements 
and that being licensed to place children domestically is not 
sufficient for placing internationally.
    Response: We are not making any changes in response to these 
comments. The Department recognizes that intercountry adoptions in the 
United States frequently bring together an agency licensed in one State 
and a family located in a different State. The Convention and the IAA 
do not change any applicable State requirements that an agency be 
licensed or otherwise authorized in the State to provide services in 
the State. Under the IAA and Sec.  96.30(c), to provide adoption 
services in a Convention case, an agency or person must be: (1) 
Licensed or otherwise authorized in each State in which it is providing 
adoption services; or (2) if it wishes to work in a State in which it 
is not licensed, work through an agency or person who is licensed or 
authorized and who is acting as an exempted or supervised provider, or 
through a public domestic authority of that State. Thus, an agency not 
licensed in a particular State may provide services to a client in that 
State, through another agency or person that is licensed or authorized 
to provide services in that State and additionally is functioning as a 
supervised provider or an exempted provider or through a public 
domestic authority.
    These regulations are consistent with the IAA, which states 
explicitly, in section 503(a), that the IAA is not meant to preempt 
State law unless a provision of State law is inconsistent with the 
Convention or the IAA.
    It will continue to be up to each State to determine if 
requirements to be licensed to provide adoption services in 
intercountry cases should be different from requirements to provide 
services in domestic adoption cases. Regardless of how an individual 
State resolves this issue, however, an agency or person involved in 
intercountry adoption services under the Convention will need to comply 
with these regulations.
    2. Comment: Two commenters believe that it is essential that 
agencies and persons be permitted to work with other agencies and 
persons licensed in different States. They ask that accrediting 
entities pay close attention to the activity under such relationships, 
however, so that Sec.  96.30 is followed properly.
    Response: In deference to the important role that cross-State 
relationships and networks play in matching children from many 
different countries of origin with prospective adoptive parent(s) 
throughout the United States, the regulations allow such relationships 
to continue. We believe that the regulations also allow appropriate 
oversight of these relationships, so that no change is needed in 
response to this comment. The regulations, in particular subpart C, 
provide for a ``primary provider'' to be responsible for ensuring that 
all of the adoption services, as defined in Sec.  96.2, are provided in 
a Convention case. The primary provider assumes responsibility for its 
use of supervised providers under the provisions of Sec. Sec.  96.45 
and 96.46, which includes ensuring that those providers are in 
compliance with applicable State licensing and regulatory requirements 
in all jurisdictions in which they provide adoption services. Failure 
to do so may

[[Page 8087]]

be grounds for the accrediting entity to take adverse action against 
the primary provider, and may jeopardize the primary provider's 
accreditation or approval status. The Department believes that this 
system will ensure proper monitoring of supervised providers by primary 
providers.

Section 96.31--Corporate Structure

    1. Comment: Several commenters oppose allowing agencies that 
qualify for nonprofit tax status under State law alone from receiving 
accreditation. They suggest that only agencies that have qualified for 
nonprofit tax status under Sec.  501(c)(3) of the Internal Revenue Code 
should be permitted to become an accredited agency. One commenter 
requests that the Department bear in mind that several countries 
already have regulations that would explicitly require U.S. agencies to 
have nonprofit status and/or tax-exempt status under Sec.  501(c)(3) of 
the U.S. Tax Code.
    Response: We left Sec.  96.31(a) of the proposed rule unchanged in 
the final rule. For accreditation purposes, agencies must have 
nonprofit status under the laws of any State or must qualify for 
nonprofit tax treatment under Sec.  501(c)(3) of the Internal Revenue 
Code. The Department does not believe there is sufficient justification 
to increase the regulatory burden of the rule by requiring all agencies 
to obtain nonprofit status under Sec.  501(c)(3) and under State law. 
Nothing in this rule prohibits agencies from qualifying as a nonprofit 
under both Federal and State law, if they so choose, and an agency or 
person will of course have to obtain Sec.  501(c)(3) status if so 
required by a particular Convention country in which the agency or 
person wishes to operate.
    2. Comment: A commenter recommends that attorneys and other 
individual practitioners be required to be licensed to provide adoption 
services under State law, rather than only authorized to provide 
adoption services, in order to become approved persons.
    Response: The Department declines to change the rule. IAA section 
203(b)(1)(G) requires only that nonprofit agencies must be licensed to 
provide adoption services in at least one State in order to become 
accredited. Section 203(b)(2) of the IAA does not apply the requirement 
to have a State license to persons (for-profit agencies and 
individuals) that seek to become approved. We note that Sec.  96.30(a) 
requires that persons be authorized by State law to provide adoption 
services in at least one State, which may have the practical effect of 
requiring persons to become licensed, depending on the laws of the 
State in question.

Section 96.32--Internal Structure and Oversight

    1. Comment: Numerous commenters request that agencies and persons 
be required to include adult adoptees on their boards of directors or 
other similar governing bodies to provide input on the needs and 
concerns of the intercountry adoption community.
    Response: The Department agrees that the standard should encourage 
accredited agencies and approved persons to have boards of directors 
that include individuals who understand the concerns of adoptees and 
other individuals involved in adoptions. Therefore, the Department has 
amended Sec.  96.32(b) to add a standard that agencies and persons have 
a board of directors or a similar governing body that, among other 
things, includes one or more individuals with experience in adoption, 
including, but not limited to, adoptees, birth parents, prospective 
adoptive parent(s), and adoptive parents. Articles 11 and 22 of the 
Convention expressly recognize the importance of having agencies and 
persons directed and staffed by persons qualified by their ethical 
standards and by training or experience. We believe that adding this 
flexible standard is consistent with these articles, and that there is 
no reason to limit the standard to adoptees.
    2. Comment: A few commenters emphasize that approved persons should 
have the same education, adoption service experience, and management 
credentials that the regulations require of the chief executive officer 
(CEO) of an agency.
    Response: Individual approved persons will need to oversee any 
supervised providers and ensure effective use of resources and 
coordinated delivery of services. The Department therefore agrees that 
it is important that they have education, adoption service experience, 
and management expertise similar to that which we expect of the CEO of 
an agency. Therefore, the Department has changed Sec.  96.32(a) to 
apply to situations where the person is an individual.
    3. Comment: Several commenters suggest that a new standard be added 
to Sec.  96.32, which would read, ``The agency or person has in place 
appropriate procedures and standards, pursuant to Sec. Sec.  96.45 and 
96.46, for due diligence on selection, monitoring, and oversight of 
supervised providers.'' Others are concerned that accrediting entities 
have sufficient information to check on an agency's or person's past 
practices.
    Response: The Department agrees that one of the critical functions 
that accredited agencies and approved persons will serve is to provide 
oversight to the supervised providers with whom they work. Therefore, 
in response to these comments, the Department has added a new standard 
to the final rule, as Sec.  96.32(d), which reads: ``The agency or 
person has in place procedures and standards, pursuant to Sec. Sec.  
96.45 and 96.46, for the selection, monitoring, and oversight of 
supervised providers.''
    We have also added a new standard as Sec.  96.32(e). Section 
96.32(e) requires the agency or person to disclose to the accrediting 
entity any other names by which the agency or person is or has been 
known, under its current or any former form of organization, and 
addresses, and phone numbers used when such names were used. It also 
requires the agency or person to disclose the name, address, and phone 
number of current directors, managers, and employees, and, if any such 
individual previously served with another provider of adoption 
services, the name, address, and phone number of the provider of which 
they were a director, manager, or employee. Additionally, the rule now 
requires that the agency or person must provide information on any 
entity that it currently uses or intends to use as a supervised 
provider. These modifications to Sec.  96.32(e) will help to ensure 
that an accrediting entity may investigate an agency's or person's past 
and present practices, the past and present practices of their 
directors, managers, and employees, and their selection and oversight 
of supervised providers.

Financial and Risk Management

Section 96.33--Budget, Audit, Insurance, and Risk Assessment 
Requirements

    1. Comment: Commenters request clarification of the budget and 
audit requirements. Some commenters state that annual independent 
audits are too expensive and burdensome.
    Response: In response to these comments, the Department has revised 
Sec.  96.33(a) and Sec.  96.33(b). Subsection (a) requires that the 
agency or person operates under a budget that discloses all 
remuneration, regardless of its form, paid to the agency's or person's 
board of directors, managers, employees, and supervised providers. 
Agencies and persons should find subsection (b) less burdensome than 
the proposed rule, in that it now requires annual internal budget 
review and oversight and independent audits only every four

[[Page 8088]]

years. The yearly internal financial review reports must be submitted 
for inspection by the accrediting entity. We believe these provisions 
strike a balance between ensuring financial soundness and transparency 
and reducing the costs of annual external audits.
    2. Comment: Numerous commenters request that the phrase 
``independent professional assessment of risks'' in Sec.  96.33(g), on 
insurance coverage, be more clearly defined. Commenters believe that an 
agency's or person's management, insurance agent, financial, or legal 
counsel should be allowed to conduct a risk assessment review. Several 
commenters are concerned that requiring a review by an independent risk 
assessment firm will cause undue financial hardship for small agencies 
and will raise the costs of accreditation and approval. As well, a 
commenter believes that agencies or persons should not be required to 
include in a risk assessment an evaluation of the risks of using 
supervised providers in the United States and abroad. Other commenters 
believe that an agency or person should be allowed to determine its own 
level of risk and purchase the amount of insurance that it believes is 
necessary.
    Response: The Department has changed the risk assessment standards 
in response to concerns that the proposed rule was too burdensome. The 
final rule standard provides for the agency or person to conduct a risk 
assessment, but no longer provides that the assessment be conducted by 
an independent professional. An agency's or person's management, 
insurance agent, financial, or legal counsel may conduct the 
assessment. Additionally, the assessment must include a review of 
information on the availability of insurance coverage for Convention-
related activities. The agency or person must use the assessment to 
meet the requirements of Sec.  96.33(h), which requires an agency or 
person to maintain professional liability insurance in amounts 
reasonably related to its exposure to risk, and to evaluate what other 
types of insurance to carry. To conform to changes in Sec. Sec.  96.45 
and 96.46 (removing requirements for assumption of liability for 
supervised providers) and Sec.  96.39(d) (allowing use of waivers), we 
have deleted the requirement that the risk assessment include an 
evaluation of the risks of providing services directly to clients who 
do not sign blanket waivers of liability and the risks of working with 
supervised providers. The individual conducting the risk assessment 
will now have discretion to determine the elements to complete the risk 
assessment, including any risks arising from working with supervised 
providers or requiring clients to sign limited and specific waivers.
    The Department recognizes that requiring risk assessments is a 
change from the current practice of many adoption service providers. 
The Department is requiring a risk assessment so that the agency or 
person can use it to determine the appropriate amount of insurance 
coverage needed to protect families working with accredited agencies 
and approved persons as well as for the protection of the agencies and 
persons themselves.
    3. Comment: Several commenters support the standard on professional 
liability insurance coverage, but are extremely concerned about the 
lack of available insurance. Commenters state that insurance coverage 
options are limited, and coverage can be unaffordable for many agencies 
or persons. Commenters request that the Department explore alternative 
means for agencies and persons to obtain insurance coverage. Commenters 
requested that the Department consider the following suggestions: (1) 
Agencies and persons self-insuring through the use of a bond account 
held by a public authority; (2) agencies and persons self-insuring 
through the purchase of a Certificate of Deposit in the name of the 
agency and a public authority; (3) establishment by the Department of a 
federally backed insurance program; (4) establishment of a Federal 
insurance commission; (5) a Hague insurance commission established to 
offer insurance coverage at a reasonable rate; and/or (6) an insurance 
waiver program for agencies and persons who show that they are unable 
to secure insurance coverage despite attempts to do so.
    Response: The IAA requires a standard on insurance coverage. The 
Department understands the concern of many commenters about the 
availability and affordability of professional liability insurance 
coverage for adoption service providers, but anticipates that such 
coverage will become available and affordable as the market responds to 
the demand the standard will create. These suggestions for developing 
alternatives to insurance coverage by existing market mechanisms in any 
event far exceed the authority granted to the Department by the IAA.
    4. Comment: Several commenters suggest that the Department request 
that the insurance industry analyze underwriting intercountry adoption 
insurance policies to parents to increase the likelihood that insurers 
may be more willing to provide an agency or person insurance coverage 
as well. Commenters suggest that the regulations allow prospective 
adoptive families and agencies and persons to enter into binding 
arbitration with capped awards in order to limit litigation and thereby 
encourage insurers to underwrite liability insurance for agencies and 
persons.
    Response: The IAA does not give the Department the authority to 
regulate the insurance industry. Nor does the Department believe it can 
or should require parents to enter into binding arbitration agreements 
with agencies or persons. Nothing in the IAA or these regulations would 
prevent prospective adoptive parent(s) and agencies or persons from 
agreeing to use binding arbitration as opposed to litigation in the 
event of a problem, however. Thus it is possible that practices will 
develop that will respond to some of these suggestions.
    5. Comment: A commenter recommends that the regulations provide 
that, if a company provides insurance policies to any nonprofit 
organizations, it must provide insurance to adoption placement 
agencies. This commenter perceives that insurance companies 
discriminate against adoption placement agencies. A commenter requests 
that insurers be required to consider the differences in the services 
offered by agencies before determining coverage, such as whether the 
agencies place orphans or whether they place children whose birth 
parents consent to an adoption. The commenter also suggests that there 
should be federally-mandated guidelines to govern fee increases by 
insurance companies.
    Response: As noted, the IAA does not give the Department authority 
to regulate the insurance industry, including the types of coverage 
insurance companies must provide or the fees charged for insurance.
    6. Comment: Many commenters believe that the requirement in Sec.  
96.33(g) to maintain a minimum of $1,000,000 per occurrence in 
insurance is excessive and suggest a lower amount or that an amount not 
be specified in this rule. Commenters are concerned in particular that 
the insurance requirements will increase the costs of adoption. Many 
commenters point out that professional liability insurance is very 
difficult to obtain; some say that insurance companies commonly refuse 
coverage to adoption service providers, particularly if the provider 
has ever been party to a lawsuit, and others state that their coverage 
was cancelled after just one insurance claim. Those that do have 
coverage find their insurance premiums to be expensive. Another 
commenter, however, maintains that

[[Page 8089]]

liability insurance coverage is readily available to qualified agencies 
and persons. Some commenters also agree with the $1,000,000 per 
occurrence liability insurance requirement and believe the requirement 
is essential for the protection of adoptive families. One commenter 
suggests requiring an umbrella insurance policy instead of an aggregate 
limits policy.
    Response: Section 203(b)(1)(E) of the IAA requires that a standard 
be in force that provides for ``adequate liability insurance for 
professional negligence and any other insurance that the Secretary 
considers appropriate.'' Therefore, the issue is not whether to have a 
standard requiring professional negligence insurance (also referred to 
as professional liability insurance), but what amount is ``adequate'' 
and whether additional insurance requirements are ``appropriate.'' For 
this reason, the Department is maintaining an insurance standard.
    The Department has revised the standard, however, to require that 
professional liability insurance be maintained in amounts reasonably 
related to exposure to risk, but in no case in an amount less than 
$1,000,000 in the ``aggregate.'' As discussed at section III, 
subsection B.1 of the preamble, the Department made this decision after 
reviewing the range of comments on this issue and engaging a consultant 
to gather additional information on available insurance coverage and 
industry practices in underwriting policies. In summary, we now believe 
that approving a $1 million aggregate standard instead of $1 million 
per occurrence is adequate and appropriate. Setting the standard to 
require a minimum of $1 million in the ``aggregate'' establishes an 
outer limit on total coverage and not a per incident or claim limit.
    Setting the standard only for coverage in the aggregate potentially 
provides more flexibility to both agencies and persons seeking 
insurance and the underwriting company to set lower ``per occurrence'' 
limits within the $1 million aggregate coverage, should the market 
respond by offering policies tailored to the Convention standard. 
Setting the amount of coverage required in the aggregate at $1 million, 
while still requiring that coverage be related to actual risk, also 
strikes a balance between the burden the insurance standard imposes on 
agencies and persons seeking to provide Convention adoption services 
and protecting the interests of birth parents, prospective adoptive 
parent(s), and children.
    The final rule standard in Sec.  96.33(g) continues to require the 
agency or person to use a risk assessment to determine the actual 
amount of professional liability insurance to be maintained under Sec.  
96.33(h)--that is, to determine if more coverage than the minimum is 
appropriate.
    7. Comment: Some commenters are concerned that specifying an 
insurance amount will encourage lawsuits for that amount or greater. 
Another commenter thinks that the insurance requirement will keep 
agencies and persons from placing special needs children due to fear of 
increased litigation.
    Response: As noted, the Department cannot avoid drafting a 
professional liability insurance standard, because the IAA explicitly 
requires agencies and persons to have ``adequate'' professional 
liability insurance. Requiring a certain amount of insurance coverage 
in the aggregate, rather than per occurrence, should reduce the 
likelihood of increased litigation, since plaintiffs will not consider 
that they can necessarily receive the total amount. The Department does 
not believe that the insurance requirement will discourage agencies and 
persons from placing special needs children. If an agency or person is 
in compliance with the disclosure requirements of Sec.  96.49, then it 
will disclose to prospective adoptive parent(s) any known special needs 
of the child, which should help decrease the number of claims against 
agencies or persons.
    8. Comment: Commenters are concerned about the cash reserve 
provision in Sec.  96.33(e). Commenters also seek insertion of the word 
``charitable'' to Sec.  96.33(f).
    Response: We have reduced the period of time for which the agency 
or person must maintain on average financial resources to meet its 
operating expenses to two months. We also changed Sec.  96.33(e) to 
allow assets, as well as cash reserves and other financial resources, 
to be taken into account in determining whether the agency is 
maintaining sufficient financial resources. These changes are meant to 
reduce the burden that this standard imposes on agencies and persons, 
while still requiring sound financial practices. We have also amended 
the standard to require the agency or person to take into account not 
only its projected volume of cases, but also its size, scope, and 
financial commitments.
    We have also inserted the word ``charitable'' before donation in 
Sec.  96.33(f), as we agree that only charitable donations should be 
accepted under the standard.
    9. Comment: Some commenters, as noted in other subparts, were 
concerned about the case transfer procedures, and the respective roles 
of accrediting entities and agencies and persons in the transfer of 
cases.
    Response: As discussed in detail in the responses to comments on 
Sec. Sec.  96.7 (above), 96.77 (below), and 96.87 (below), we have 
modified a number of provisions in the rule relevant to Convention case 
transfers in the event that an agency or person is no longer providing 
services in Convention adoption cases. Our modifications include adding 
a standard in Sec.  96.33(e) to require that an agency or person must 
have a plan in place to transfer Convention cases if it ceases to 
provide or is no longer permitted to provide adoption services in 
Convention cases. The plan must include provisions for organized 
closure and reimbursement to clients of funds paid for services not 
rendered.

Section 96.34--Compensation

    1. Comment: A commenter suggests that it is standard practice to 
pay incentive fees to individuals who refer prospective adoptive 
parent(s) and questions why commissions, incentives, and contingency 
fees cannot be paid to a person providing a referral.
    Response: Section 96.34(a), which is limited to individuals 
providing intercountry adoption services, does not directly deal with 
the issue of clients who are paid incentives for referring other 
potential clients, such as prospective adoptive parent(s), to an agency 
or person. This practice must conform, however, to the general 
principle that fees may not be paid if they are made contingent on 
placing or locating a child for an adoptive placement.
    The Convention directs public foreign authorities and public 
domestic authorities to prevent improper financial gain in connection 
with an intercountry adoption. Further, section 203(b)(1)(A)(iv) of the 
IAA specifically bars agencies and persons from retaining personnel on 
a ``contingent fee basis.'' Generally speaking, a fee is contingent if 
it is only paid if an adoption is completed. The standard prohibits 
contingency fees consistent with the IAA statutory mandate. We are 
maintaining the prohibition in Sec.  96.34(a), and have clarified that 
the standard prohibits contingency fees for each child ``located'' for 
an adoptive placement, in addition to contingency fees for each child 
``placed'' for adoption.
    2. Comment: Commenters who would like the financial aspects of the 
adoption process to be more transparent suggest that agencies or 
persons be required to account for all revenues and that any

[[Page 8090]]

payments made to third-party vendors who are related to a staff member 
of an agency or person should be required to be reported along with 
information stating the amount of payment and the type of service 
rendered. Many other commenters support the proposed compensation 
regulations stating that they provide reasonable guidance to agencies 
on how to structure compensation for intercountry adoptions.
    Response: The Department has maintained the general structure of 
Sec.  96.34 and has added Sec.  96.34(f), which requires that agencies 
and persons identify any third-party vendors to whom clients are 
referred for non-adoption services. The agency or person must disclose 
any corporate, financial, or familial relationship with such vendor. We 
have also made a related change to Sec.  96.40(c)(1), setting a 
standard that requires disclosure of all third-party fees to 
prospective adoptive parent(s). For more information on the reasons for 
this modification, see the responses to comments for Sec.  96.40(c).
    3. Comment: Commenters seek clarification as to whether or not 
fees-for-services constitute incentive fees. They recommend that 
employees and supervised providers be paid an hourly rate or salary for 
services actually rendered, not on a contingency fee basis. Paying 
employees or supervised providers a regular salary minimizes the 
incentive for a person to make more referrals to earn higher fees.
    Response: Fees for adoption services do not constitute incentive 
fees. We have clarified in Sec.  96.34(a), however, that the standard 
disallows any contingency fee arrangements related to locating or 
placing a child for adoption. For further information, see the response 
to comment 1 for Sec.  96.34.
    4. Comment: Commenters question what or who will determine whether 
the fees, wages, and salaries paid to the directors, officers, and 
employees of an agency or person are ``unreasonably high.'' One 
commenter feels that a free enterprise system should determine fees, 
wages, and salaries. Other commenters recommend that fees, wages, and 
salaries be evaluated in light of the country's economy and be 
commensurate with the cost of living in the country of origin.
    Response: The concept of ``reasonableness'' does not lend itself to 
bright line rules, but rather requires an assessment in light of a 
variety of relevant factors. We have crafted standards in Sec.  
96.34(d) and (e) that identify the factors the Department believes 
should be considered in determining if fees, wages, or salaries paid 
are unreasonably high in relation to services rendered. We have made 
one change to guide this analysis, requiring that the compensation be 
judged by taking into account the country in which the adoption 
services were provided and the relevant norms for compensation within 
that country, to the extent known to the accrediting entity. We have 
also added supervised providers to the list of those whose compensation 
must meet the reasonableness standard of Sec.  96.34(d). We believe 
this approach, which avoids inappropriately setting caps or range 
limits on salaries and wages, will be workable, particularly because 
accrediting entities will often have access to comparable data on 
agencies and persons under their authority.

Ethical Practices and Responsibilities

Section 96.35--Suitability of Agencies and Persons To Provide Adoption 
Services Consistent With the Convention

    1. Comment: To ensure that the referral process is based on fair, 
legal, and objective criteria, one commenter requests that the 
Department monitor the ethical practices of those involved in the 
referral process.
    Response: It is difficult to police unethical practices in 
referrals of children eligible for adoption from countries of origin. 
Nevertheless, Sec.  96.46 sets out standards that an agency or person 
must follow in using supervised providers in other countries, including 
by ensuring that such foreign supervised providers do not engage in 
practices inconsistent with the Convention's principles of furthering 
the best interests of the child and preventing the sale, abduction, 
exploitation or trafficking of children. See also the responses to 
comments on Sec.  96.46.
    Ultimately, however, it is the responsibility of the country of 
origin's competent authorities to ascertain if Article 4 requirements 
for determining if a child is eligible for adoption have been met. If 
it appears that the Central Authority or public foreign authorities of 
a country of origin have improperly referred a child who is not 
eligible for adoption, then the two Central Authorities (country of 
origin and receiving country) involved will need to resolve the 
problem.
    2. Comment: A commenter requests that language on ethical standards 
be mandatory. The commenter also wants the Department to make the 
oversight mechanisms related to specific standards more explicit. Other 
commenters support the standards on suitability as written. One of 
these commenters thinks that the proposed standards will help agencies 
and persons uphold high ethical practices when providing adoption 
services.
    Response: The issue of mandatory standards is discussed in the 
responses to comments on Sec.  96.27 and at section II, subsection B of 
the preamble, above. The regulations include numerous ethical 
standards. The extensive disclosure standards in Sec.  96.35, which 
remain largely unchanged from the proposed rule, are designed to ensure 
that agencies and persons are not violating any ethical standards or 
any of the guiding principles of the Convention or the IAA, except that 
Sec.  96.35(c) does have new language to clarify that the disclosure 
requirements for agencies and person require disclosure of information 
related to individual directors, officers, and employees associated 
with the agency or person in any operations under a different corporate 
or professional name. State licensing regulations or other State laws 
also may contain mandatory ethical standards for agencies, persons, or 
individuals in certain professions.
    3. Comment: One commenter requests that the provisions in Sec.  
96.35 include any individual working for the agency or person if such 
individual is involved in any of the ``adoption services'' defined in 
Sec.  96.2.
    Response: Section 96.35(c) requires an agency or person (for its 
current and any former names) to disclose information about its 
directors, officers, and employees to the accrediting entity. (Section 
96.35(d), as well, requires disclosures from persons who are individual 
practitioners.) Thus, this standard already requires the disclosures 
related to individuals providing adoption services requested by this 
comment. Also, as noted previously, Sec.  96.32(e)(3) now requires that 
the agency or person disclose the names of any entity it intends to 
use, or is using, as a supervised provider.
    4. Comment: Some commenters request that an agency or person be 
required to disclose any instance in which it lost its license, even 
for a brief period of time. Other commenters are concerned that 
agencies and persons providing multiple services will be denied 
accreditation or approval because their license was suspended or 
permanently revoked for violations in service areas other than 
intercountry adoption.
    Response: The Department has changed Sec.  96.35(b)(1) to delete 
the word ``permanently.'' Thus, an agency or person will need to 
disclose any instances in which it lost the right to provide adoption 
services for any period of time in any State or country. In

[[Page 8091]]

addition, the Department has changed Sec.  96.35(b)(5) to make it clear 
that an agency or person (under its current or any former names) must 
disclose to the accrediting entity information on complaints related to 
the agency's or person's provision of adoption-related services filed 
with any State, Federal, or foreign regulatory body of which the agency 
or person was notified. A change was also made to Sec.  96.35(b)(6) to 
require disclosures of government investigations, criminal or child-
abuse charges, or lawsuits related to the provision of child welfare or 
adoption-related services. We have not changed the requirement that the 
agency or person disclose any licensing suspensions for cause or 
sanctions by oversight bodies, as we believe such information will be 
valuable to the accrediting entity even if the license pertained to 
another service area.
    5. Comment: Some commenters recommend that the Department keep the 
requirement in Sec.  96.35(b)(5) that agencies and persons disclose to 
accrediting entities any disciplinary actions or written complaints, 
including the basis and disposition of such complaints, for the past 
ten years. Other commenters feel that the ten-year requirement is too 
long and recommend three to five years. Several commenters recommend 
that agencies and persons have to disclose only substantiated written 
complaints or lawsuits in which the agency or person was found liable. 
Commenters are also concerned that unsubstantiated accusations will 
delay an agency's or person's accreditation/approval application if 
``written complaint'' is not more clearly defined in Sec.  96.35(b)(5). 
Other commenters are concerned that information about lawsuits will not 
be disclosed because of confidentiality provisions in any settlement 
agreements.
    Response: We have modified Sec.  96.35(b)(5) to limit the 
disclosure requirement to those written complaints filed with any State 
or Federal regulatory body and of which the agency or person was 
notified. The agency or person must still disclose the outcome of all 
such complaints.
    The Department declines to change the ten-year requirement for 
disclosure of complaints in Sec.  96.35(b)(5), because we believe ten 
years of information will best allow accrediting entities to make an 
informed accreditation determination. We also have not changed Sec.  
96.35(b)(6), notwithstanding the concern that confidentiality 
provisions in settlement agreements will prevent disclosure of 
information about lawsuits. We do not want agencies or persons to be 
prevented from applying because another party is unwilling to modify 
the disclosure provisions of a settlement agreement, and the 
accrediting entity will have ample authority to determine, on a case-
by-case basis, what steps an applicant should be asked to take to 
provide sufficient information about the basis and disposition of a 
lawsuit, including seeking a waiver of any confidentiality provisions.
    6. Comment: One commenter states that the term ``malpractice 
complaint'' in proposed rule Sec.  96.35(b)(6) is a subset of ``written 
complaints'' in Sec.  96.35(b)(5), while others appear to believe that 
it is not a duplicative term.
    Response: The Department has modified Sec.  96.35(b)(6) to delete 
reference to ``malpractice complaints.'' The requirement to disclose 
the basis and disposition of lawsuits related to the provision of child 
welfare or adoption-related services in Sec.  96.35(b)(6) is sufficient 
to cover malpractice complaints.
    7. Comment: Commenters are concerned that States, as well as 
agencies and persons, have not kept sufficient records of every 
complaint. Commenters suggest that parents send all past complaints to 
accrediting entities for review. Several commenters request that a 
central registry be established to record and verify that an agency or 
person is in good standing.
    Response: We have revised the standard at Sec.  96.35(b)(5) to 
limit the complaints that must be disclosed to written complaints over 
the prior ten-year period that were filed with Federal authorities or 
public domestic authorities, and of which the agency or person was 
notified. This is more congruent with the disclosure requirement in 
Sec.  96.35(b)(6) related to lawsuits and other investigations by 
governmental authorities, and clarifies that the intent is to require 
disclosure of complaints filed with regulatory authorities, such as 
licensing authorities, rather than complaints made directly to the 
agency or person. We believe the agencies or persons will ordinarily 
have information about such significant complaints available, even for 
the period before these regulations take effect.
    After the initial round of accreditation/approval has been 
concluded and the Convention has entered into force, the accrediting 
entity will also have available to it information on complaints made 
directly to the agency or person, under Sec.  96.41. This standard 
requires accredited agencies and approved persons to keep written 
records of complaints against them as well as the steps taken to 
investigate and respond to the complaints. These written records must 
be made available to the accrediting entities and the Department, upon 
request.
    8. Comment: One commenter suggests that agencies and persons 
evaluate the moral character of their employees, associates, and 
supervised providers.
    Response: Section 96.35(c)(5) requires disclosure of businesses or 
activities that have been or are currently carried out by individual 
directors, officers, or employees of the agency or person, which are 
inconsistent with the principles of the Convention. Additionally, Sec.  
96.35(b)(9) requires an agency or person to disclose to the accrediting 
entity their prior or current association, if any, with businesses or 
activities that are inconsistent with the principles of the Convention. 
The Department believes these standards provide specific guidance to 
accredited agencies and approved persons on ethical adoption practices. 
To the extent that the ``moral character'' of individual employees is a 
separate issue, it is beyond the scope of these regulations.
    9. Comment: Commenters request that background checks be conducted 
on all employees of an agency or person. One commenter notes that the 
proposed rule requires that some employees have background checks, and 
notes that States may not be able to complete criminal background 
checks and child abuse clearances for such individuals without 
additional statutory authority.
    Response: Section 96.35(c)(3) requires an agency or person to 
disclose to the accrediting entity the results of a criminal background 
check and child abuse clearance for U.S. employees of agencies or 
persons who work directly with parent(s) or children, as well as for 
those in senior management positions (unless such checks have been 
included in the State licensing process). This requirement furthers the 
IAA's mandate that the agency or person must have a sufficient number 
of appropriately trained and qualified personnel.
    The accrediting entity must have criminal and child abuse 
background information for this subgroup of employees to assess if they 
are capable of safely providing services directly to children and their 
families. Broadening the group of employees subject to these background 
checks would not substantially contribute to the accrediting entity's 
evaluation of the agency's or person's capacity to provide adoption 
services, however, and would not warrant imposing the financial burden, 
administrative burden, and other complexities associated with obtaining 
and considering background

[[Page 8092]]

information in the hiring process of all employees.
    This regulation of course cannot in itself authorize States to 
implement criminal background investigations and child abuse 
clearances. The Department recognizes that, while the use of criminal 
and child abuse background checks is standard in many States, 
especially in the context of employees who work with children, other 
States specify unique parameters and restrictions for obtaining and 
using criminal background checks. In addition, criminal background 
checks may invoke protections of other Federal laws, such as the Fair 
Credit Reporting Act. To be clear, Sec.  96.35(c)(3) does not supersede 
or supplant any other Federal or State statute or regulation that might 
otherwise restrict access to or consideration of background checks. If 
the State criminal background check is unavailable by operation of 
State law, then the agency or person can so demonstrate.
    10. Comment: One commenter requests that agencies or persons be 
required to disclose whether or not they have ever operated under a 
different corporate name.
    Response: Both Sec.  96.35(b) and (c) now require disclosures 
related to operations under a different corporate name, as does Sec.  
96.32(e). The Department made these changes so that agencies and 
persons could not avoid disclosing information by applying for 
accreditation or approval under a different name than they formerly 
used. See also responses to comment 3 on Sec.  96.32 and comment 11 on 
Sec.  96.35.
    11. Comment: Commenters request that an agency or person be 
required to disclose any financial irregularities on the part of the 
agency or person and any of its employees. Commenters recommend that an 
agency's or person's previous business history be included with its 
application for accreditation or approval. Commenters also request that 
agencies and persons be required to disclose any current and past 
business activities that are inconsistent with the principles of the 
Convention.
    Response: We modified the rule to require agencies and persons to 
make disclosures to accrediting entities about individual directors, 
officers and employees under not only their current corporate names, 
but also under any former names. Additionally, Sec.  96.35(c)(2) 
requires an agency or person to disclose any convictions or current 
investigations for acts involving financial irregularities by 
directors, officers, or employees in senior management positions. The 
Department does not require such disclosure for all employees because 
we believe it sufficient to focus on the acts of senior management 
personnel--that is on those in a position to control and manage the 
agency's or person's finances. Also, to ensure compliance with the 
Convention's principles, the regulations have been changed at Sec.  
96.35(c)(5) to require disclosure of businesses or activities that are 
inconsistent with the principles of the Convention and that ``have been 
or are currently'' carried out by individual directors, officers, or 
employees of the agency or person.
    12. Comment: One commenter believes that social workers, like 
lawyers, should be required to provide a certificate of good standing 
from their State licensing authority. If they are not in good standing, 
the social worker must provide an explanation and supporting 
documentation. The commenter recommends that any disciplinary action 
taken against the individual should be immediately reported to the 
State licensing authority and the accrediting entity.
    Response: To ensure the high standards of social workers who 
operate as approved persons and provide Convention adoption services, 
the Department has added a standard at Sec.  96.35(d)(4) to require 
social workers seeking approval to provide a certificate of good 
standing or an explanation, accompanied by relevant documentation, of 
why he or she is not in good standing, for every jurisdiction in which 
he or she has been licensed. If an accrediting entity takes adverse 
action against a social worker acting as an approved person that alters 
his or her approval status, the accrediting entity must report that 
adverse action to the State licensing authority, pursuant to revised 
Sec.  96.77(d).

Section 96.36--Prohibition on Child Buying

    1. Comment: A commenter believes that there is already a 
prohibition against child buying in DHS regulations and asks the reason 
for re-writing the law.
    Response: The current DHS prohibition on child buying, codified at 
8 CFR 204.3, applies to intercountry adoption procedures, as defined in 
the INA and DHS regulations. For a standard to be effective in the 
accreditation/approval context, however, it must be included in the 
Department's accreditation and approval regulations, 22 CFR Part 96. 
Otherwise, the standard may not be used as a basis for denying 
accreditation/approval or taking adverse action. Thus, the standard in 
Sec.  96.36 is not duplicative. To be consistent with the DHS 
regulation, the requirements of Sec.  96.36 are generally the same as 
those of 8 CFR 204.3.
    2. Comment: Some commenters request that the regulations stipulate 
what type of expenses can be paid, and under what circumstances, to 
avoid coercive situations and to protect children and birth parents. A 
commenter recommends that there be no expansion in the type of adoption 
services expenses that can be covered in an individual case. Other 
commenters are very concerned that the standard not include 
prohibitions against certain expenses that are permitted or required by 
countries of origin, to avoid precluding U.S. citizens' eligibility to 
adopt in certain Convention countries.
    Response: The Department believes that these concerns are already 
addressed in the rule, so that no revision is required. First, the 
standard in Sec.  96.36(a) clearly prohibits agencies and persons from 
``giving money or other consideration, directly or indirectly, to a 
child's parent(s), other individual(s), or an entity as payment for the 
child or as an inducement to release the child.'' This means that, if 
the intent of any payment is to buy a child or to obtain consents for 
adoption, then the agency or person has violated this standard. This 
standard, derived from the current, longstanding DHS regulations at 8 
CFR 204.3, protects birth parents, children, and adoptive parents. 
Regardless of how adoption services fees are described, characterized, 
or classified, if the fee is remitted as payment for the child, or as 
an inducement to release the child, then the standard is violated and 
appropriate action may be taken against an agency or person. The 
standard takes into account that the country of origin's adoption laws 
and procedures, not the Department's regulations on U.S. adoption 
service providers, determine what type of expenses, such as the care of 
the child or contribution for child protection services, must be 
covered as part of the adoption services fees. The Convention country 
of the child's origin has the authority to determine allowable adoption 
expenses in that country as long as the expenses are consistent with 
the Convention requirements of Article 4 (consents may not be induced 
by payment or compensation of any kind) and other requirements are 
followed. In its role as Central Authority, the Department can, 
however, communicate any concerns about a country of origin's laws and 
provisions for allowable adoption services expenses.
    Finally, to address the concerns of commenters who believe the 
broad prohibition against child-buying could

[[Page 8093]]

be interpreted by accrediting entities to exclude certain types of 
fees, such as the charitable contribution required in China, the 
standard highlights that, if permitted or required by the child's 
country of origin, reasonable payments for the provision of child 
welfare and child protection services may be made. The Convention and 
the IAA do not prohibit contributions to support family and child 
protection services in Convention countries. If the contribution is not 
intended to induce an individual to place a child for adoption, it is 
not inconsistent with these accreditation/approval standards. 
Therefore, we are not prohibiting a required contribution to an 
orphanage or State welfare organization in a child's Convention 
country. In Sec.  96.40(b)(6), however, we do require that the client 
receive an explanation of the intended use of the contribution and the 
manner in which the transaction will be recorded and accounted for. 
Overall, we believe that the standard is responsive to the significant 
concerns about having the flexibility to take account of Convention 
country practices while upholding the basic principle against payments 
for a child.
    3. Comment: Several commenters believe that setting fee limits for 
adoption services is the only way to prohibit child buying.
    Response: Please see Sec.  96.34(a) and (d) and the responses to 
comments on these sections, above. Although we understand and share the 
commenters' concerns regarding fee limits, this rule does not set fee 
caps for adoption services and the Department has no authority under 
the IAA to set fees for adoption services. Setting caps would be 
impractical and difficult to enforce, especially if the expectation was 
that the Department would somehow make countries of origin conform to 
the Department's fee structure. We would be unable to set fee caps that 
would take into account all of the variables in the various countries 
that are involved in Convention adoptions, not to mention the 
fluctuations in exchange rates and currency values. We do agree, 
however, that the services the fees relate to should be readily 
transparent, provided to clients, and subject to accrediting entity 
oversight. Thus, we have included standards in Sec.  96.40 that require 
agencies and persons to provide prospective adoptive parent(s) with 
extensive information on fees and expenses related to the adoption.
    4. Comment: Several parents wish to ensure that any agency that 
gives money or other consideration as payment for a child will lose its 
State license to be an adoption agency.
    Response: States, not the Federal government, license agencies. 
Because State law governs licensing issues, we do not have the 
authority to revoke State licenses. To be responsive to the concerns 
behind this comment, however, we have modified the standard in Sec.  
96.77(d) to make it clear that an accrediting entity must notify the 
State licensing authority of the agency or person in question if the 
accrediting entity takes adverse action that impacts the accreditation 
or approval status of the agency or person.
    5. Comment: One commenter requests that birth parents be made aware 
of how to pursue complaints.
    Response: Under Sec.  96.41(a) agencies and persons must provide 
contact information for the Complaint Registry to their clients, 
including birth parents in cases of children emigrating from the United 
States to a Convention country. Section 96.41(b) also requires agencies 
and persons to permit any birthparent to lodge complaints about 
adoption services.
    In cases of children immigrating to the United States, the child's 
Convention country should address birthparent complaints about 
violations of the Convention. Once a complaint has been lodged with the 
child's Convention Country, the authorities of that country have the 
responsibility to investigate the matter and to ensure compliance with 
the Convention. If the complaint involves a U.S. agency or person, the 
Central Authority may communicate the complaint directly to the 
Department, to the Complaint Registry or to the accrediting entity 
overseeing the agency or person at issue.
    6. Comment: One commenter requests that all parties involved in an 
adoption proceeding sign a sworn statement stating how much 
compensation they received for adoption services as a prerequisite to 
approval of a petition on behalf of the adopted child to enter the 
United States. The commenter believes this statement should include a 
declaration that the parties have not paid any illegal sum to officials 
or made any other illegal payments.
    Response: We are making no change in response to this comment. The 
concern expressed may be addressed, in part, by the fee transparency 
provisions of the rule, but these regulations governing the 
accreditation/approval of adoption service providers are not an 
appropriate vehicle to address the conduct of parents or impose 
additional requirements on the DHS petition process.
    7. Comment: One commenter states that it is critical to have 
defining criteria that will determine what constitutes ``reasonable'' 
payment for services in Sec.  96.36. Another commenter wants no change 
in the language defining ``reasonable payments for activities'' because 
it provides an appropriate level of specification.
    Response: The Department has not changed the language in Sec.  
96.36, setting the standard that payments for necessary activities 
related to adoption be reasonable, because it mirrors the principles in 
the Convention and the IAA.
    8. Comment: One commenter suggests the creation of a central 
organizing authority that would verify relinquishments before a child 
is placed in an adoption-related orphanage.
    Response: This suggestion is beyond the scope of these regulations 
on accreditation/approval. Pursuant to Article 4 of the Convention, the 
competent authority in the child's Convention country (depending upon 
the country of origin, this may be the Central Authority, a court, or 
other government authority) has the obligation to ensure that consents 
to an adoption have been given freely and without inducement or 
compensation of any kind.
    9. Comment: Two commenters request that the agency or person ensure 
that employees and agents are aware of the prohibitions of the Foreign 
Corrupt Practices Act (FCPA) as enumerated at 15 U.S.C. 78-dd. They 
believe the FCPA has been underutilized and should be employed more 
often.
    Response: The FCPA is an anti-bribery statute that agencies and 
persons already must comply with regardless of these regulations. The 
Department of Justice is responsible for all criminal enforcement of 
the FCPA and shares authority over civil enforcement with the 
Securities and Exchange Commission. We note in response to this comment 
that, under Sec.  96.72, an accrediting entity must refer to the 
Attorney General or other law enforcement authorities any substantiated 
complaints that involve conduct that is in violation of Federal law, an 
obligation that encompasses the FCPA. We have not added a specific 
reference to the FCPA in the standards because the standards similarly 
require agencies and persons to comply with all relevant State and 
Federal law, again encompassing the FCPA. We note, as well, that the 
standards on compensation (Sec.  96.34) and prohibiting child buying 
(Sec.  96.36) should help prevent agencies and persons from engaging in 
behavior that might trigger the FCPA.
    10. Comment: Several commenters are concerned that the current 
regulations

[[Page 8094]]

provide no complaint or investigative process for handling allegations 
of abusive practices. They request that monitoring and enforcement 
procedures be outlined. Commenters request that the Department 
carefully consider when, how, and by whom investigations will be done 
to ``prevent the abduction, sale of, or traffic in children'' and to 
ensure the regulations provide the tools such investigators need to 
fulfill these responsibilities.
    Response: Civil monitoring and enforcement procedures are outlined 
in detail in subparts J and K of these regulations. Specifically, 
pursuant to Sec.  96.72, certain substantiated complaints must be 
reported promptly to the Department, and, as appropriate to State 
licensing authorities, the Attorney General, or other law enforcement 
authorities. We share the commenters' concerns regarding conduct in the 
child's country of origin; these issues are discussed in the responses 
to comments on Sec.  96.46 on foreign providers, and above at section 
II, subsection D and section III, subsection A.2 of the Preamble.
    11. Comment: One commenter would like the regulations to place 
increased responsibility on U.S. agencies and persons to work with 
supervised providers in Convention countries that do not participate in 
child buying.
    Response: The regulations in Sec.  96.46 clearly provide that any 
agency or person that works with a foreign supervised provider is 
responsible for requiring that the foreign supervised provider adheres 
to the standard in Sec.  96.36(a), which prohibits an agency or person 
from giving money or other consideration, directly or indirectly, to a 
child's parent(s), other individual(s), or entity as payment for the 
child or as an inducement to release the child.

Professional Qualifications and Training for Employees

Section 96.37--Education and Experience Requirements for Social Service 
Personnel

    1. Comment: A commenter is concerned that requiring an agency or 
person to only use employees to perform adoption-related social service 
functions will create serious problems for small agencies or persons. 
Small agencies and persons often hire non-employees to conduct home 
studies because they do not have the resources to employ full-time 
social workers.
    Response: These regulations do not prohibit an agency or person 
from using independent contractors instead of employees to provide 
adoption services. It is critical to understand, however, that any such 
individuals, regardless of whether they are called contractors, agents, 
facilitators, assistants, volunteers, etc., are considered as 
supervised providers if they provide adoption services, unless they 
qualify as an exempted provider in the United States or perform a 
service abroad qualifying for verification under Sec.  96.46(c). An 
agency's use of supervised providers must adhere to the standards in 
Sec. Sec.  96.45 and 96.46.
    2. Comment: Some commenters request that the ``appropriate 
qualifications'' in Sec.  96.37(a) be defined more specifically.
    Response: We do not think a line-by-line description of credentials 
for every possible job with any agency or person is necessary. We 
believe that the accrediting process will permit accrediting entities 
to compare personnel credentials for covered positions with industry 
norms to ascertain if the standard set forth in Sec.  96.37(a) has been 
met.
    3. Comment: Most, though not all, commenters agree that a master's 
degree in social work (MSW), or a related field, is not a necessary 
qualification for home study preparers, as the proposed rule required 
at Sec.  96.37(f). Suggestions for a standard on home study preparers' 
education and experience ranged from requiring a bachelor's degree in 
social work (or another related field) and experience with intercountry 
adoption, to requiring an MSW, at least four years experience in 
intercountry adoption, and country-specific training. Others requested 
that the Department consider a ``grandfather'' clause in Sec.  
96.37(f), like the one in Sec.  96.37(d)(3), to exempt current 
practitioners from the master's degree requirement. Other commenters 
believe that the proposed regulations provided adequate flexibility 
because agencies or persons could hire MSWs as supervisors or other 
qualified professionals with an educational background in a related 
human services field.
    Response: We have eliminated the master's degree requirement for 
home study preparers employed by agencies and persons, because we 
understand that it may be difficult to retain social workers with a 
master's degree in some locations and that requiring professional 
degrees for all home study preparers would substantially increase 
salary costs, especially for small agencies. We have changed the 
regulation so it now requires that such employees be: (1) Licensed or 
authorized to conduct a home study under the laws of the State in which 
they practice; (2) in compliance with INA requirements for home study 
preparers in 8 CFR 204.3(b); and (3) supervised by an employee of an 
accredited agency or approved person that meets the educational and 
experience requirements of Sec.  96.37(d). We have also discussed this 
change at section III, subsection B.2 of the preamble.
    4. Comment: Other commenters were concerned that the degree 
requirements in Sec.  96.37(e) for non-supervisory employees providing 
adoption services which require the application of clinical skills and 
judgment are too restrictive.
    Response: We have modified Sec.  96.37(e) so that non-supervisory 
employees providing non-exempt adoption services that require the 
application of clinical skills and judgment must have at least a 
bachelor's degree in any field and prior experience in family and 
children's services, adoption, or intercountry adoption. Such employees 
must be supervised by an employee of the accredited agency or approved 
person who meets the educational and experience requirements in Sec.  
96.37(d). This adjustment should enable agencies and persons to recruit 
and retain the non-supervisory personnel they need to complete 
Convention adoptions.
    5. Comment: A commenter is concerned that requiring child 
background study preparers to hold an MSW or other Master's degree will 
hinder Convention adoptions. The commenter believes it will have 
difficulty finding child background study preparers overseas that can 
meet this requirement; in its experience, countries from which children 
are often adopted into the United States rarely have schools of social 
work, let alone Master's degree programs.
    Response: The questioner appears to be referring to an incoming 
case, in which a child background study would be prepared by a foreign 
supervised provider or by a foreign provider and verified under Sec.  
96.46(c)). In such a case, the standards in Sec.  96.37 would not apply 
to the child background study preparer.
    With respect to an employee of a U.S. agency or person, we have 
revised Sec.  96.37(g) to remove the Master's degree requirement for 
employees that prepare child background studies. This change applies to 
all employees, whether in the United States or abroad. Please see the 
response to comment 3 on this section, and section III, subsection B.2 
of the preamble for further related discussion.
    6. Comment: A commenter recommends adding a new standard as Sec.  
96.37(h), to guard against agencies or persons creating subsidiaries to 
conduct home studies as exempted providers, to evade hiring personnel 
that meet the

[[Page 8095]]

education and experience requirements in Sec.  96.37, which the 
commenter appears to believe agencies and persons will find to be too 
onerous. The commenter believes that a standard is needed to state that 
when there is overlapping funding, supervision, personnel, or office 
space between ``exempt'' home study providers and non-exempt agencies 
or persons, that the home study providers are not, in fact, exempt.
    Response: We are not adding a new standard in response to this 
comment, as we believe that the accrediting entity will have adequate 
authority under these regulations to determine whether or not an agency 
or person is improperly evading compliance with the standards in Sec.  
96.37 by creating a ``shell'' exempted provider, and take adverse 
action as appropriate. The adjustment in the final rule to remove the 
Master's degree requirement for home study preparers employed by an 
agency or person may also address the commenter's concern that agencies 
or persons will be tempted to create subsidiaries to try to evade 
hiring employees that meet the standards in Sec.  96.37.
    7. Comment: A commenter asks that the Department regulate caseload 
size. They believe that a caseload of 30-35 should be the absolute 
maximum for intercountry adoption.
    Response: While we understand the concern about large caseloads, 
the Department is not persuaded that a specific caseload limit should 
be a standard for accreditation or approval. We expect accrediting 
entities to conduct oversight, pursuant to subpart I, to ensure that an 
agency or person is providing quality services in substantial 
compliance with these standards.

Section 96.38--Training Requirements for Social Service Personnel

    1. Comment: A commenter believes that an agency or person must 
provide new employees training on the Convention, the IAA and Federal 
regulations, but that such training is unnecessary for licensed social 
workers who will have significant knowledge in this area.
    Response: The training requirements in Sec.  96.38 apply to all 
employees of the agency or person. We believe that training of social 
services personnel involved in intercountry adoptions is so essential 
that we also effectively impose the Sec.  96.38 training requirements 
on supervised providers in the United States, pursuant to Sec.  
96.45(b)(2). In recognition of the concern expressed above, however, 
Sec.  96.38(d) provides that an agency or person may exempt employees 
from the elements of the orientation and initial training required by 
Sec.  96.38(a) and (b) if the employee has demonstrated experience with 
intercountry adoption, the Convention, and the IAA. We have changed 
Sec.  96.38(d) to make clear that current as well as newly hired 
employees may be exempted from training, so that the burden and 
financial impact of training current employees is limited, and by 
changing the phrase ``prior experience'' to ``demonstrated 
experience,'' to give agencies and persons flexibility when their newly 
hired and current employees already have experience with intercountry 
adoption and knowledge of the Convention and the IAA.
    2. Comment: Commenters requested that personnel receive balanced 
training that is uniform and consistent throughout the intercountry 
adoption community. Specifically, one commenter believes that personnel 
should be trained about both the positive and negative aspects of 
intercountry adoption. Another commenter recommends that employee 
training include a course on ethical considerations in intercountry 
adoption.
    Response: We believe that the extensive list of topics that must be 
covered under Sec.  96.38 will ensure that balanced training is 
provided. We have added a requirement to Sec.  96.38(a)(5) that the 
training include a discussion of ethical considerations in intercountry 
adoption. Section Sec.  96.38(b)(6) also includes a requirement for 
agencies and persons to provide training on adoption outcomes and the 
benefits of permanent family placement.
    3. Comment: Commenters request clarification that, during initial 
employee training, training in ``child, adolescent, and adult 
development'' applies to the development of the adopted child, and does 
not require training in human development in general.
    Response: We agree and have clarified Sec.  96.38(b)(10) 
accordingly.
    4. Comment: Commenters want to know whether or not the training 
requirement in Sec.  96.38(c) is in addition to any training that may 
already be required by their State. If so, commenters state that the 
regulation would require many employees to perform 30-40 total hours of 
annual training, with the high costs of such training passed on to 
prospective adoptive parent(s).
    Response: We have clarified in Sec.  96.38(c) that continuing 
education hours required under State law may count toward the training 
requirement, as long as the training meets the substantive requirements 
of the standard by being related to current and emerging adoption 
practice issues.
    5. Comment: A commenter asks if the required training courses must 
be approved or accredited and, if so, what governing body will accredit 
or approve the courses. Other commenters recommend that employees 
should be required to document training.
    Response: Because of the variety of training opportunities and 
variance in available training opportunities according to geography, 
the Department has not mandated that training be accredited or approved 
by any particular entity, and has added documented distance learning 
courses as another example of an acceptable means to provide training 
under Sec.  96.38(c). When the accrediting entity evaluates whether an 
agency and person complies with Sec.  96.38, the agency or person will 
have to provide some reliable documentation that confirms that 
employees received (or qualified for exemption from) the required 
training. The accrediting entity's on-site evaluators will check both 
the training records and the content of the training materials used to 
ensure that they are covering the content areas required under Sec.  
96.38. We do not believe, however, that it is necessary in regulations 
to detail what kind of documentation must be used.
    6. Comment: One commenter strongly endorses the minimum requirement 
of twenty hours of training for an agency's or person's employees who 
provide adoption-related services, while others think that twenty hours 
of annual training is excessive. One commenter proposes a compromise, 
suggesting a reduction in training hours and/or extending the period to 
complete the training. Another commenter opposed the training 
requirements altogether, while still others endorsed the training 
requirement as written.
    Response: We are persuaded that requiring thirty hours of training 
over a two-year period is reasonable and have changed the rule 
accordingly. Using the time frame of two years provides flexibility, 
and reducing the hours from twenty per year to approximately fifteen 
per year reduces the time burden and cost to agencies and persons. At 
the same time, the standard helps to ensure that those providing social 
services involving clinical skills and judgment receive ongoing 
training on adoption practice issues.
    7. Comment: A commenter requests clarification regarding whether or 
not staff exempted from initial training are still required to complete 
the continuing training in Sec.  96.38(c).

[[Page 8096]]

    Response: Staff exempted from orientation training in Sec.  
96.38(a) and (b) are still required to complete the training 
requirement of thirty hours in a two-year period under Sec.  96.38(c). 
Thus, both new hires that become incumbents and incumbents must get 
thirty hours of training over each two-year period of their employment 
with the agency or person.
    8. Comment: Commenters request that the Central Authority take a 
greater role in collating and disseminating best practices and 
translated copies of foreign adoption laws and other adoption related 
information and establish a resource library as part of its duties 
under Article 7(2)(a) of the Convention.
    Response: We understand the need for best practices guides and 
pamphlets and the interest in a resource library. The Central Authority 
duties of the Department are, however, outside the scope of these 
regulations, which lay out the rules regarding accreditation and 
approval of agencies and persons.

Information Disclosure, Fee Practices and Quality Control Policies and 
Practices

Section 96.39--Information Disclosure and Quality Control Practices

    1. Comment: Some commenters think that it is unduly burdensome for 
agencies and persons to provide a sample contract to prospective 
adoptive parent(s) at initial contact, as required in Sec.  96.39(a). 
Other commenters support requiring agencies and persons to provide a 
sample copy of their contract.
    Response: The adoption services contract contains important 
information about what an agency or person is agreeing to do and what a 
client is expected to do in a Convention adoption. The Department 
believes that the information contained in the adoption services 
contract is critical for prospective clients to consider at the 
beginning of the adoption process as they compare agencies and persons 
and determine which services are available from the different 
providers. Therefore, the Department is not removing the requirement 
that agencies and persons provide a sample contract to prospective 
clients upon initial contact.
    The Department has taken steps to reduce the burden on agencies and 
persons of complying with the standards in Sec.  96.39(a). The 
Department has removed from Sec.  96.39(a)(1), as redundant, the 
proposed standard that the agency or person provide a separate 
explanation of the mutual rights and responsibilities of clients and 
the agency or person. The Department has also deleted Sec.  
96.39(a)(3), which would have required disclosures of all entities with 
whom the prospective client could expect to work in the United States 
and in the child's country of origin and the usual costs associated 
with their services. Instead, new Sec.  96.39(a)(2) now requires an 
agency or person to disclose this information to prospective client(s), 
upon initial contact, only for all supervised providers with whom the 
prospective client(s) can expect to work.
    2. Comment: Commenters request that the Department review several 
contracts and establish a list of permitted or prohibited clauses to 
create contract uniformity.
    Response: We have taken no action on this request, as we believe it 
is beyond the scope of this rule's establishment of accreditation/
approval standards. In addition, adoption services contracts must still 
conform to different individual State laws, which would pose serious 
challenges to developing one uniform model contract.
    3. Comment: A commenter requests guidance on how agencies and 
persons should monitor disruptions and dissolutions, in order to comply 
with Sec.  96.39(b)(1).
    Response: Please see the response to comments on Sec.  96.43, which 
governs the tracking and recording of disruptions and, wherever 
possible, of dissolutions in Convention adoption cases as required 
under the IAA for Congressional reporting purposes. In general, the 
provisions in Sec.  96.39(b)(1) on maintenance and disclosure of 
disruptions and dissolution statistics to clients mirror Sec.  96.43 
and only require agencies or persons to provide the information to 
clients for the prior three calendar years.
    4. Comment: Commenters suggest that agencies and persons should 
also disclose to prospective adoptive parent(s) whether or not any of 
their current or former clients have been prosecuted for crimes that 
they committed against their children after the child's adoption.
    Response: While the Department shares the commenters' concern about 
parental abuse of adopted children, we have not made this change. The 
information might suggest a deficiency in the agency or person's 
screening of adoptive parents, but it is post-adoption information that 
will not be consistently available, particularly when agencies do not 
provide significant post-adoption services. In addition, there are 
other ways in which an accrediting entity can determine whether proper 
standards are followed in preparing or approving home studies.
    5. Comment: A commenter believes that data on the number of parents 
who apply to an agency or person to adopt each year is proprietary 
information and requests that we remove Sec.  96.39(b)(2) requiring 
such information be disclosed, if requested, to clients and prospective 
clients.
    Response: We are not revising the rule in response to this request. 
Section 203(b)(1)(v) of the IAA mandates that the ``agency discloses 
fully its policies and practices, the disruption rates of its 
placements for intercountry adoption, and all fees charged by such 
agency for intercountry adoption.'' Data on the number of adoption 
placements is essential to evaluate data on disruption rates. Data on 
the number of parents who apply to an agency or person to adopt each 
year is also important to disclose because, in conjunction with the 
data on placements, it allows prospective clients to judge the agency's 
policies and practices with regard to how likely and how quickly it is 
able to arrange placements.
    6. Comment: A commenter believes that, because there is no way to 
account accurately for all children awaiting adoption, agencies or 
persons should not be required to furnish this number to prospective 
adoptive parent(s).
    Response: The Department has changed Sec.  96.39(b)(3) to require 
that an agency or person make available to prospective adoptive 
client(s) the number of children eligible for adoption and awaiting an 
adoptive placement referral via the agency or person. The new language 
clarifies that an agency or person is only responsible for disclosing 
the number of children who are awaiting an adoptive placement referral 
via the agency or person.
    7. Comment: Many commenters request that Sec.  96.39(d), 
prohibiting an agency or person from requiring a client to sign a 
blanket waiver of liability, be omitted. Other commenters request that 
waivers of liability be prohibited.
    Response: The Department has deleted the provision prohibiting 
blanket waivers of liability from Sec.  96.39(d), as discussed in more 
detail above at section III, subsection B.3 of the preamble. Section 
Sec.  96.39(d) of the final rule permits an agency or person to require 
a client to sign a waiver of liability as part of the adoption services 
contract if that waiver complies with applicable State law. The waiver 
must also be limited and specific, and based on risks that have been 
discussed and explained to the client in the written adoption services 
contract.
    8. Comment: As well as requesting that waivers be permitted, 
commenters make a variety of requests related to the

[[Page 8097]]

specifics of such voluntary waivers including: (1) That ``approved'' 
language be included in voluntary and informed risk waivers; (2) that 
standard risk waiver forms be developed and used; and/or (3) that 
country-specific uniform risk waiver forms be mandatory. They believe 
that, after acknowledging the possible risks, prospective adoptive 
parent(s) will choose to proceed despite the known obstacles.
    Response: It is the responsibility of each agency and person to 
ensure that any waiver complies with applicable State law, and the 
Department does not intend to mandate any specific waiver form or 
language. It would be impracticable and inconsistent with its role for 
the Department to create a risk waiver form for adoptions. To be clear, 
it is the responsibility of each agency and person to disclose risks to 
be assumed by the client that are known at the time the adoption 
services contract is signed. If risk waiver forms are used, the agency 
or person must take responsibility for the forms in light of the States 
and Convention countries involved, and any other relevant factors.
    9. Comment: Several commenters express deep concern about the 
burden that the disclosure/waiver provisions and quality control 
practices in Sec.  96.39 will impose on smaller, nonprofit agencies and 
persons.
    Response: The Department has tried to balance the concerns of small 
agencies with the goal of protecting prospective adoptees, prospective 
adoptive parent(s) and birth parents, all within the context of 
complying with the requirements set forth by the Convention and the 
IAA. The Department has changed the language of Sec.  96.39(d) to 
permit a client to sign a waiver of liability, a revision that should 
help reduce the impact on small agencies by allowing agencies to 
allocate risks. We did not delete the other information disclosure 
requirements in Sec.  96.39, because overall we believe they are 
necessary to implement section 203(b)(1)(A)(v) of the IAA, or otherwise 
further the purposes of the IAA and Convention.
    10. Comment: Several commenters raise concerns about how the 
accrediting entities and the Department will ensure that agencies and 
persons permit document review and site evaluations when requested.
    Response: The Department has clarified the standard in Sec.  
96.39(e) so that an agency or person must cooperate with reviews, 
inspections, and audits by the accrediting entity or the Department. 
Section 96.25(c) also explicitly provides that accreditation or 
approval may be denied, or adverse action taken, solely on the basis 
that an agency or person did not provide requested documents or 
information, or did not make employees available.
    11. Comment: A commenter suggests that, because some Convention 
countries prohibit the use of the Internet to place children for 
adoption, agencies and persons should be required to inform the 
accrediting entities at the time of accreditation or approval if they 
work in such Convention countries, to ensure compliance with such laws.
    Response: Each agency or person is responsible for complying with 
the laws of the Convention country with which it is working, as well as 
with applicable State and Federal laws. The Department has modified the 
language in Sec.  96.39(f) to clarify that an agency or person may use 
the Internet only to place individual children who are eligible for 
adoption when such use is not prohibited by the State or Federal law or 
by the laws of the child's country of origin, and then only under the 
conditions stated in paragraphs (1)-(4). The Department is not 
requiring, in Sec.  96.39(f), that agencies and persons inform 
accrediting entities of the laws of Convention countries, however, 
because we believe that accrediting entities already have the 
authority, in their discretion, to request that their accredited 
agencies and approved persons provide the applicable laws of the 
Convention countries with whom they work so that they can ensure 
compliance with such laws.
    12. Comment: Commenters suggest that a new standard be added to 
require that agencies and persons provide prospective adoptive 
parent(s) upon initial contact, a statement that all documents and 
information referred to in Sec.  96.39 are available to them, and that, 
if the organization has 501(c)(3) status, they may also obtain IRS 
Forms 990 and 1023.
    Response: Section 96.39(a) requires the agency or person to provide 
significant documents and information to prospective clients upon 
initial contact. We have changed Sec.  96.39(b) to provide that the 
agency or person must inform clients or prospective clients of the 
additional information available under Sec.  96.39(b) and provide it 
upon request. We believe it is sufficient to disclose the additional 
information listed in Sec.  96.39(b) only upon request from a client or 
prospective client, in light of the burden on agencies and persons. We 
are not adopting the comment as it relates to IRS Forms 990 and 1023, 
because the rule does not require that an agency or person obtain 
501(c)(3) status, and again, do not believe the burden on agencies or 
persons is warranted. Nothing in this standard would, however, prohibit 
the agency or person from choosing to provide additional material upon 
initial contact, or a prospective client from requesting additional 
material.
    13. Comment: One commenter requests that agencies and persons be 
required to disclose to prospective adoptive parent(s) the criteria by 
which they determine a child's suitability for intercountry adoption.
    Response: We have taken no action in response to this request 
because, under Article 4 of the Convention, the competent authorities 
or public foreign authorities of the country of origin determine if a 
child is eligible for adoption, not the agency or person. In an 
incoming adoption case, the U.S. agency or person, in accordance with 
Sec.  96.52(b)(2), is responsible only for obtaining from the Central 
Authority or other competent authority in the country of origin the 
child background study, proof that the necessary consents to the 
child's adoption have been obtained (per Article 4 of the Convention), 
and the necessary determination that the prospective placement is in 
the child's best interests, and transmitting that information to the 
prospective adoptive parent(s).

Section 96.40--Fees Policies and Procedures

    1. Comment: To enable prospective adoptive parent(s) to compare 
agencies and persons, many commenters request that agencies and persons 
be required to provide a detailed breakdown or schedule of all fees and 
expenses in a clear and understandable format, including a list of all 
individuals that would be involved in the adoption, the services they 
would provide and how much they would be paid for services rendered. 
Several commenters highlight the need to have annotated fees and 
expenses for all costs associated with caring for children and birth 
parents prior to finalization of the pending adoption. Other commenters 
note the importance of detailing expenses and fees owed to third 
parties not acting as supervised providers. One commenter notes that 
prospective adoptive parent(s) are at times required to subsidize 
adoption referrals and assignments of children that foreign agencies 
have made through informal agreements, private connections, or ``inside 
government relationships.'' The commenter cites payments called 
``foreign fees'' requested from adoptive parents that generally exceed 
$10,000. The commenter recommends that agencies and persons be required 
to

[[Page 8098]]

break down what is included in this ``foreign fee.'' Another commenter 
is concerned that foreign officials require fees for ``facilitating'' 
the adoption process. Another commenter requests that the regulations 
not require a breakdown of expenses but rather list fees in particular 
Convention countries based on average costs there. Numerous commenters 
support the regulations as written.
    Response: Although we have made a few revisions for clarity, the 
final rule, like the proposed rule, requires agencies and persons to 
provide a detailed breakdown of fees and expenses for adoption 
services. Section 96.40(b) requires an agency or person to disclose the 
expected total fees and estimated expenses for the following 
categories:
     Home study;
     Adoption expenses in the United States;
     Foreign country program expenses;
     Care of the child;
     Translation and document expenses;
     Fixed contributions that prospective adoptive parent(s) 
must make to child protection or child welfare service programs in the 
child's Convention country or in the United States; and
     Post-placement and post-adoption reports.
    In response to concerns about the items covered in the category of 
foreign country program expenses, we have extracted from that category 
the costs for the care of the child in the country of origin and listed 
it in Sec.  96.40(b)(4) as a cost that must be separately identified. 
We think that identifying this item separately, and listing examples of 
the types of services that may be covered, will increase transparency 
in identifying costs that are generally considered part of the foreign 
country program fee. We have also changed Sec.  96.40(b)(3) to include 
legal services as an example of foreign country program expenses.
    We have also added a category for otherwise undisclosed fees and 
estimated expenses to Sec.  96.40(c). Section 96.40(c) provides for 
disclosure of services provided by third parties, and of travel and 
accommodation expenses arranged by the agency or person, if not 
disclosed under Sec.  96.40(b). Third-party fees are fees that the 
agency or person expects that prospective adoptive parent(s) will have 
to pay directly to a third party, such as a country of origin's Central 
Authority. This disclosure standard ensures that an agency or person 
provides in its disclosure for fees and estimated expenses for payments 
to Central Authorities, translations, and documents and that it 
discloses whether the prospective adoptive parent(s) will be expected 
to pay these costs directly to third parties (either in the United 
States or the child's Convention country), or through the agency or 
person. This requirement applies regardless of whether the prospective 
adoptive parent(s) will be billed directly or through the primary 
provider.
    In sum, we believe the final rule provides proper controls on the 
potential for improper financial gain--a primary goal of the 
Convention--without imposing unreasonable burdens on agencies and 
persons. The regulations require a sufficient level of detail about 
fees and expenses to allow prospective adoptive parent(s) to have a 
clear understanding of how an agency or person uses fees for services 
to complete a Convention adoption, thus enabling them to make informed 
choices when selecting an agency or person to assist with their 
Convention adoption.
    2. Comment: A commenter requests that the Department, as the 
Central Authority, record and track fees to provide a benchmark so that 
agencies and persons charge similar fees to prospective adoptive 
parent(s), and that it assess the reasonableness of the fees.
    Response: Section 104 of the IAA requires the Department to submit 
an annual report to Congress on numerous aspects of intercountry 
adoptions. Pursuant to section 104(b)(7) of the IAA, one element of the 
annual report is the range of adoption fees charged in connection with 
Convention adoptions involving immigration to the United States and the 
median of such fees set forth by the country of origin. Thus, the 
Department will be tracking the general trends in fees. Specific 
information on the fees charged by an agency or person for Convention 
adoptions, must be provided by the agency or person to the accrediting 
entity pursuant to Sec.  96.43(b)(6). Section 96.40 also requires the 
disclosure of a wide range of fee information to prospective clients 
and clients, which should allow prospective adoptive parent(s) to 
compare fees. The IAA does not, however, give either to the Department 
or the accrediting entities the authority to regulate the level of fees 
an agency or person charges to clients, for reasonableness or 
otherwise.
    3. Comment: A commenter recommends that an agency or person must 
fully disclose to prospective adoptive parent(s), in the written 
adoption services contract, information on adoptive parent eligibility 
criteria, mutual rights and responsibilities of parents, the role of 
the agency or person, the services to be provided by the primary 
provider, the names of supervised providers, its practices, policies 
and procedures, and its refund policies.
    Response: The terms to be included in an agency's or person's 
adoption services contract are covered by various sections of the 
regulations. Collectively, these sections require much of the 
information the commenter believes should be included. Please see 
responses to comments 1 and 9 on Sec.  96.39 and to comment 2 on Sec.  
96.50. Additionally, Sec.  96.51(b) requires an agency or person to 
inform prospective adoptive parent(s) in the adoption services contract 
whether or not the agency or person will provide post-adoption 
services.
    4. Comment: One commenter requests that all references to 
``expenses'' be removed from Sec.  96.40(b)(1)-(7). The commenter 
states that it is very difficult to predict the actual expenses of an 
individual intercountry adoption because there are so many unknown 
variables. It suggests that fees be based on the average cost of an 
adoption in a particular Convention country, rather than expenses. 
Several other commenters are concerned that the regulations preclude 
them from providing fee estimates for the overall cost of the 
intercountry adoption process.
    Response: The Department agrees that it can be difficult to know 
the exact cost of each service that is required to complete an 
individual intercountry adoption. The regulations do not preclude an 
agency or person from providing a fee estimate for the total, overall 
cost of the intercountry adoption process. The standards do provide, 
however, that the total fee charged must include a breakdown, by 
specified categories, of how the overall fee is used. The Department 
has devised a standard that requires agencies and persons to categorize 
the fees and expenses an agency or person expects to charge in a 
uniform format. The fee categories an agency or person must use are in 
Sec.  96.40(b) and (c). The rule does not require an agency or person 
to itemize every specific charge for each listed category. To reinforce 
this point, the Department is modifying the rule to refer to ``expected 
total fees'' and ``estimated expenses,'' as appropriate, throughout 
Sec.  96.40.
    5. Comment: One commenter requests that the rule clearly state that 
estimated contributions should be a fixed dollar amount or range, not a 
percentage, unless required by the country of origin.
    Response: The Department has changed the provision to state that an 
agency or person must disclose ``any

[[Page 8099]]

fixed contribution amount or percentage,'' because it intends this 
provision to cover circumstances where the law of the country of origin 
may require the contribution to be determined by a percentage as well 
as circumstances where the contribution is based on a fixed dollar 
amount. We recognize that this is not the preference of the commenter, 
but believe the approach taken is consistent with the IAA, the 
Convention, and current practices.
    6. Comment: Commenters request clarification regarding Sec.  96.40 
and the refund of fees paid for services not rendered. Commenters are 
concerned that agencies or persons may decide to classify all fees as 
nonrefundable. They believe that all fees should be refunded if the 
adoption is terminated due to agency problems, and if there is no fault 
on the part of the prospective adoptive parent(s).
    Response: An agency or person incurs administrative and other 
expenses even if a child is not ultimately placed with prospective 
adoptive parent(s). Therefore, the Department is not modifying the rule 
to prohibit a portion of fees from being nonrefundable. The Department 
believes that Sec.  96.40(a)'s requirement that agencies and persons 
disclose up front conditions under which their fees or expenses may be 
refundable or nonrefundable will allow prospective adoptive parent(s) 
to make informed choices about which agency or person they want to 
assist them with a Convention adoption.
    7. Comment: A commenter thinks that requiring the disclosure of 
special service fees creates an obligation for an agency or person to 
specifically identify if the fee is used to support other purposes of 
the organization, such as cultural programs or scholarships. The 
commenter believes that, while it is reasonable to disclose this 
information, it is not practical for an agency or person to account for 
the use of such funds on a case-by-case basis.
    Response: The Department believes that it is important to disclose 
the practice of using a portion of fees to fund special services such 
as cultural programs for adoptees and their families, but recognizes 
that it may be impractical to require an agency or person to account 
for the use of such funds on an individual basis. Accordingly, we have 
changed the standard at Sec.  96.40(e) (which appeared as Sec.  
96.40(d) in the proposed rule) to require, where applicable, ``a 
general description of the programs supported by such funds.''
    8. Comment: Commenters support the standard at Sec.  96.40(f) 
(which appeared as Sec.  96.40(e) in the proposed rule) that agencies 
and persons provide prospective adoptive parent(s) the option to 
transfer funds overseas to minimize direct cash payments when possible. 
One commenter would like ``minimized'' to have a clearer definition in 
this context and would like a maximum amount specified for direct cash 
transactions. Another commenter points out that many countries of 
origin do not have monetary systems that allow direct fund transfers, 
and that some foreign agencies will not accept electronic transfers.
    Response: The Department has not modified Sec.  96.40(f) on the 
transfer of funds. The Department is aware that many of the fees 
charged by public authorities in Convention countries--for example, for 
passports, birth certificates, adoption certificates, or court 
documents--must be paid in cash. For this reason, the standard does not 
mandate that agencies and persons must only use electronic fund 
transfers for all transactions or that prospective adoptive parent(s) 
should not expect to use any cash in the Convention country. Instead, 
the regulations require agencies and persons to use available methods 
so that the need for direct cash transactions by prospective adoptive 
parent(s) is minimized. It would not be practicable to set a maximum 
amount for such transactions, given the variances between Convention 
countries.
    9. Comment: A commenter is concerned about the standard in Sec.  
96.40(g) (which appeared as Sec.  96.40(f) in the proposed rule), 
allowing agencies or persons to expend up to $800 in additional, 
undisclosed fees and expenses, without specific consent of the 
prospective adoptive parent(s). As well, the commenter suggests that 
the standard should restrict the number of times an agency or person 
can obtain consent to expend funds in excess of $800 on unforeseen 
additional fees and expenses, even if the prospective adoptive 
parent(s) have waived the notice and consent requirement for such 
expenditures in advance. Two commenters suggest that the standard may 
be inconsistent with the IAA requirement that agencies and persons 
disclose fully all fees charged. They believe the standard should 
require all fees to be disclosed in advance, with no last minute fee 
increases.
    Response: The Department shares the commenters concerns about 
charging large, last minute fees that were not disclosed to the clients 
in advance. Nevertheless, it is not unusual in an intercountry adoption 
for unexpected expenses to arise in the country of origin. It would be 
unreasonable to require agencies and persons to absorb the costs of all 
unforeseen expenses that may arise in all Convention adoptions. 
Therefore, the regulations attempt to strike a balance between 
protecting prospective adoptive parent(s) from large, undisclosed fees 
and allowing agencies and persons some flexibility to handle unforeseen 
circumstances that may arise in their Convention adoption cases.
    Thus, the final rule requires that, to charge fees or expenses that 
were not disclosed in the written adoption services contract, an agency 
or person must obtain the consent of the prospective adoptive parent(s) 
prior to expending any funds in excess of $1,000 (increased from $800 
in the proposed rule) for which the agency or person will hold the 
prospective adoptive parent(s) responsible, or give the prospective 
adoptive parent(s) the opportunity to waive the notice and consent 
requirement in advance. The Department is satisfied that this approach 
is not inconsistent with the IAA. The amount requiring either notice 
and consent or advance waiver was increased from $800 to $1000, to 
provide flexibility, and minimize the burden of seeking consents.
    10. Comment: Commenters feel that agencies and persons should 
provide receipts for domestic fees and expenses only, and should not be 
expected to provide receipts for fees and expenses paid in the 
Convention country as proposed in Sec.  96.40(f)(3) of the proposed 
rule, which is now Sec.  96.40(g)(3). A commenter recommends that 
written receipts should be provided for fees and expenses collected 
directly by the agency or person. One commenter supports the regulation 
requiring agencies and persons to provide receipts so that all funds 
can be accounted for. The commenter is concerned that agencies and 
persons will decide to have money paid directly to hired contractors to 
avoid giving receipts.
    Response: The final rule requires that agencies and persons provide 
receipts for unforeseen Convention country fees and expenses, because 
otherwise agencies and persons would not have to account at all to 
their clients for these expenses. The Department has changed the 
standard in Sec.  96.40(g)(3), however, so that an agency or person is 
only required to provide written receipts for unforeseen additional 
fees and expenses incurred in the Convention country that were ``paid 
directly by the agency or person'' in the Convention country. As 
discussed previously, the Department has also added new Sec.  
96.40(c)(1), which requires agencies and persons to disclose fees and 
estimated expenses for

[[Page 8100]]

services provided by a third party that will be paid directly by the 
prospective adoptive parent(s). The Department also notes that 
Sec. Sec.  96.45(b)(6) and 96.46(b)(8) require that a primary provider 
require that its supervised providers provide clients with an itemized 
bill of all fees and expenses to be paid, if the supervised providers 
bill the clients directly.
    11. Comment: Commenters request that the word ``prospective'' be 
removed from Sec.  96.40(g) (which appeared as Sec.  96.40(f) in the 
proposed rule). Commenters believe that adoptive parent(s) are no 
longer prospective at this stage in the adoption process. Others 
request that the regulations remain as written.
    Response: Section 96.40(g) addresses, in part, unforeseen fees that 
may occur before an adoption is finalized, either in the Convention 
country or in the United States. Therefore, the Department believes 
that the use of the phrase ``prospective'' adoptive parent(s) is 
appropriate.
    12. Comment: A commenter thinks that Sec.  96.40(g) of the proposed 
rule, which required an accounting of ``fees and expenses incurred 
within thirty days of completion of delivery of the services'' requires 
agencies and persons to reiterate detailed information about fees that 
has already been provided. The commenter believes it is unclear whether 
this rule is asking an agency or person to substantiate the fees that 
were charged for services rendered. It also thinks that Sec.  96.40(g) 
of the proposed rule, requiring an accounting, should be removed or 
that the deadline should be extended from thirty to sixty days.
    Response: The Department agrees that requiring an accounting is 
redundant and, therefore, has deleted Sec.  96.40(g) of the proposed 
rule from the final rule. In further response to this comment, we have 
extended the time frame for agencies and persons to refund fees, which 
appears in Sec.  96.40(h), from thirty days to sixty days to minimize 
the burden arising from this standard.

Responding to Complaints and Records and Reports Management

Section 96.41--Procedures for Responding to Complaints and Improving 
Service Delivery

    1. Comment: Several commenters are concerned that the regulations 
leave agencies and persons vulnerable to complaints about activities 
outside the scope of their work. To safeguard agencies and persons from 
such complaints, one commenter suggests this section be changed to 
require that the complaint be related to the IAA.
    Response: The Department has not changed the language from the 
proposed regulation as requested. Section 96.41(b) makes clear that 
only complaints that raise an issue of compliance by the agency or 
person with the Convention, the IAA, or the regulations implementing 
the IAA are within the scope of the standard. This broader scope 
encompassing the Convention and these regulations, as well as the IAA, 
is appropriate. The Department has changed Sec.  96.41(b) so that the 
description of the type of complaints an agency or person must accept 
mirrors the description of the type of complaints that the accrediting 
entities will process, in Sec.  96.68. See also the response to comment 
1 in Sec.  96.69.
    In addition, Sec.  96.41 has also been revised to clarify that 
references to complaints in other paragraphs of Sec.  96.41 refer back 
to complaints filed pursuant to Sec.  96.41(b).
    2. Comment: Several commenters would like ``post-adoptive parent'' 
added to the list of those qualified to lodge a complaint. They believe 
that otherwise the provision could exclude the many parents who waited 
until their adoptions were complete before making complaints to the 
appropriate authorities.
    Response: We have changed Sec.  96.41(b) to refer also to adoptive 
parents.
    3. Comment: Several commenters would like the regulations to 
clarify what constitutes a complaint, so that the number of frivolous 
complaints will be limited. They recommend that the term ``complaint'' 
be defined. Several commenters suggest that a complaint be defined as a 
written document, which is signed, and which addresses a specific 
aspect of a service that is under the control of the agency or person 
and governed by the regulations. One commenter further requests the 
section be amended to reflect that anonymous complaints may not be 
filed. Another commenter would like to see the regulations protect the 
confidentiality of those who make complaints.
    Response: We understand that agencies and persons are concerned 
about being held accountable for problems that are not within their 
control. Section 96.41(b) details the components of complaints that an 
agency or person will be held accountable for addressing, stating that 
such complaints must be dated and signed by a birthparent, a 
prospective adoptive parent, an adoptive parent, or an adoptee. 
Furthermore, the complaint must refer to services or activities of the 
agency or person (including its use of a supervised provider) that the 
complainant believes raise an issue of compliance with the Convention, 
the IAA, and/or the regulations implementing the IAA. We have also 
changed Sec.  96.41 to make clear that the obligations set forth in 
this standard (with respect to the processing, recording and reporting 
of complaints) relate only to those complaints that are received 
pursuant to Sec.  96.41(b). Therefore, we do not believe it is 
necessary to add a definition of ``complaint'' to the rule.
    4. Comment: Some commenters are concerned that agencies might 
disregard Sec.  96.41's standard forbidding retaliatory action against 
those who file complaints. Several commenters recommend that the 
Department add provisions for severe penalties to be assessed against 
any agency violating the prohibition on retaliation. Other commenters 
think that the regulation forbidding retaliatory action is adequate as 
written.
    Response: We concur with those commenters who find Sec.  96.41(e) 
adequate. If an agency or person disregards the prohibition against 
retaliatory action, complainants have the option of filing a complaint 
with the Complaint Registry, for referral of the alleged misconduct to 
the accrediting entity. The accrediting entity may take adverse action 
as necessary. To further add to the protection of individuals who 
complain against an agency or person, however, we have made a minor 
change to Sec.  96.41(e) so that it explicitly prohibits an agency or 
person from retaliating against an individual for providing information 
to an accrediting entity on the agency's or person's performance. See 
also the response to comment 3 in Sec.  96.69.
    5. Comment: Two commenters are concerned that requiring agencies 
and persons to summarize complaints and corrective actions on a 
quarterly basis places too heavy a burden on agencies. They recommend 
the Department eliminate that requirement. One of the commenters 
believes semi-annual or annual reporting would be more appropriate.
    Response: Because of its value as an oversight tool, we are keeping 
the requirement that agencies and persons must provide a summary of 
complaints to the accrediting entity and the Department, but we have 
amended the regulation to require semi-annual reporting rather than 
quarterly reporting.
    6. Comment: Many commenters suggest that individuals should be able 
to file complaints directly with the Complaint Registry, not just with 
the adoption agency or person. Other commenters believe complainants

[[Page 8101]]

should try to resolve issues through the complaint process of an agency 
or person before filing with the Complaint Registry.
    Response: With the limited exception of complaints brought by 
individuals who are not party to the specific Convention case, we have 
not accepted the recommendation to allow complainants to file 
complaints directly with the Complaint Registry. An individual who is a 
party to a specific Convention adoption case must lodge any complaint 
relating to that case first with the agency or person providing 
adoption services, if a U.S. provider, and the primary provider, if 
different, in order to give the agency or person an opportunity to 
resolve the issue. For a discussion of the complaint process, please 
see the responses to comments 2, 3, and 4 in Sec.  96.69.
    7. Comment: One commenter wonders if there should be a deadline 
after an adoption has taken place for adoptive parents to file a 
complaint about adoption services.
    Response: Although we want to encourage complainants to address 
issues in a timely manner, we are reluctant to place an arbitrary time 
limit on complaints in these regulations, which regulate the 
accreditation and approval of agencies and persons. We have not changed 
the proposed rule in response to this request.
    8. Comment: Several commenters would like to ensure the complaint 
process is transparent to the public. One commenter says that an agency 
or person should be required to post on its website the periodic 
reports summarizing complaints that they send to the accrediting 
entity. One commenter requests that the regulations include a provision 
stating that adoption agencies and persons must disclose, pre-referral, 
any complaints that have been directed against the agency or person.
    Response: The Department believes that the rule's provisions on 
complaint resolution provide adequate transparency with respect to 
complaints, and is not making any change in response to these comments. 
If a complainant is dissatisfied with the resolution of a complaint by 
an agency or person, the complainant may file a complaint with the 
relevant accrediting entity through the Complaint Registry, as 
described in subpart J. Once the Convention is in force, the 
information dissemination requirements of subpart M will require 
disclosure to the public of information related to substantiated 
complaints and thereby keep the public adequately informed about 
complaints against agencies and persons.
    9. Comment: One commenter would like the regulations to include a 
provision requiring agencies to educate prospective adoptive parent(s) 
about the complaint process. Another commenter suggests an independent 
entity should be created to educate adoption clients and monitor 
complaint trends.
    Response: The regulation requires agencies and persons to provide 
their clients information regarding the complaint process, including 
contact information for the Complaint Registry, at the time the 
adoption contract is signed. Also, we have added to Sec.  96.41(b) a 
requirement that the agency or person advise complainants of procedures 
available to them if they are dissatisfied with the agency's or 
person's response to their complaint (which may include any internal 
appeals process, or information on filing complaints with the Complaint 
Registry). We feel that the standard requires adequate notice to 
prospective adoptive parent(s) about complaint procedures. We are 
hopeful that information about the Complaint Registry will be 
disseminated widely, through various channels (including the 
Department's Web site, accrediting entities' Web sites, advocacy 
groups, adoption support groups, and adoption Web sites) so that the 
notice provided by the agency or person will reinforce information 
already publicly available to prospective adoptive parent(s).
    10. Comment: A commenter recommends that the Department add a 
standard providing that ``where the agency or person is acting as the 
primary provider, the procedures specified in Sec.  96.41(a) through 
(h) [concerning responding to complaints and improving services 
delivery] include any and all complaint(s) relating to both the primary 
provider and to any and all supervised provider(s).''
    Response: We find the change unnecessary. A complaint that a 
primary provider using supervised providers had not ensured that 
adoption services were provided consistent with the IAA and these 
regulations is included within the types of complaints that may be 
filed with the agency or person under Sec.  96.41(b), or with the 
accrediting entity via the Complaint Registry pursuant to subpart J. In 
addition, Sec.  96.45(b)(2) requires primary providers to ensure that 
their domestic supervised providers comply with Sec.  96.41(b) through 
(e).
    11. Comment: One commenter requests that birth parents be made 
aware of how to pursue complaints.
    Response: Please see the response to comment 5 on Sec.  96.36, 
above, which addresses this comment.

Section 96.42--Retention, Preservation, and Disclosure of Adoption 
Records

    1. Comment: Some commenters believe that Sec.  96.42(a) should 
specify a uniform Federal time frame for the retention of adoption 
records. Several commenters object to the use of individual State laws 
to govern the retention of adoption records. Several other commenters 
request that adoption records be retained permanently because future 
children and relatives--in addition to the adoptee--have an interest in 
the adoption records. Other commenters suggest a minimum retention 
period range from 75 to 100 years.
    Response: In the proposed rule, the Department deferred entirely to 
State law in the standard for retention of adoption records. Section 
401(a) of the IAA focuses on the preservation of Convention records. 
(See the final rule for part 98 of Title 22 of the CFR published today 
in the Federal Register.) Convention records are those records in 
custody of DHS and the Department. The Department wants to stress that 
adoption records are different from Convention records. Adoption 
records are records that are received or maintained by agencies, 
persons, or domestic public authorities. The IAA is silent on whether 
or not there should be an accreditation standard on retention of 
adoption records.
    We understand the concerns regarding deference to State laws, as 
State retention requirements on preservation of records may vary. 
Section 96.42(a) of the final rule, nevertheless, continues to set a 
standard that requires that agencies and persons preserve adoption 
records for as long as State law requires. Consistency with State law 
enhances agencies' and persons' ability to comply with these 
regulations and minimizes the burden of storing records for periods 
beyond what is already required under State law.
    2. Comment: Some commenters would like to see a Federal agency, not 
agencies or persons, retain adoption records because agencies or 
persons may cease operations and records may be lost. Some commenters 
request that adoption records in the custody of agencies and persons be 
accessible through FOIA. Other commenters suggest that adoption records 
should be retained in a national archive. Another commenter believes 
that adoption records for adoptions finalized in a Convention country 
should be accessible through FOIA.

[[Page 8102]]

    Response: We are not making any change to Sec.  96.42 in response 
to these comments. Section 401(c) of the IAA mandates that applicable 
State law continue to govern disclosure, access, and penalties for 
unlawful disclosure of adoption records. By making the Department or 
some other Federal agency custodian of adoption records, we would be 
federalizing a function that Congress determined in section 401 of the 
IAA to be better regulated at the State level. In addition, attempting 
to establish a Federal records depository for non-Federal records would 
raise a host of legal, management, and funding issues. Finally, the 
Department does not have the authority to require countries of origin 
to retain adoption records. The laws of the country of origin govern 
access to and preservation of records that are maintained by its public 
foreign authorities.
    3. Comment: A commenter requests that the proposed regulations 
specify, with a strict definition, which adoption records must be 
retained.
    Response: The definition of adoption record is found in Sec.  96.2. 
It includes, but is not limited to, ``photographs, videos, 
correspondence, personal effects, medical and social information and 
any other information about the child'' received or maintained by 
agencies and persons or public domestic authorities. The definition 
includes a range of types of materials to make it clear that agencies 
and persons must retain all information about the child that comes into 
their custody. We do not believe that the definition of an ``adoption 
record'' must be changed.
    4. Comment: One commenter requests that the regulations outline 
strict enforceable regulations on the physical maintenance, storage, 
and retention of adoption records based on established and professional 
archival standards.
    Response: We have changed Sec.  96.42(a) to state that the agency 
or person must retain or archive adoption records in a safe, secure, 
and retrievable manner.
    5. Comment: Several commenters request that the regulations clarify 
that the State law that applies to adoption records is the law of the 
State in which the agency or person is physically located.
    Response: We have not made this change because, in providing that 
``applicable State law'' will govern disclosure of, access to, and 
penalties for unlawful disclosure of adoption records, IAA section 
401(c) is silent on which State's law is ``applicable.'' State 
conflicts-of-laws rules thus would determine which State law is 
applicable, if the question should arise.
    6. Comment: One commenter requests the establishment of an 
international registry that requires both the adoptee and birth parents 
to consent to release of records before adoption records may be 
disclosed.
    Response: We decline to make any change in response to this 
comment, which is beyond the scope of these accreditation/approval 
regulations. Section 401(c) of the IAA makes it clear that access to 
adoption records in the United States will be governed by applicable 
State law.
    7. Comment: Several commenters express concern about the access 
that adopted persons and their families will have to their adoption 
records. They would like the regulations to make adoption records 
available to adopted persons and their families at minimal or no cost. 
One commenter adds that agencies and persons should be required to 
respond to record requests in a timely fashion. It requests that the 
regulations clarify which information can be given to the adopted 
person or family, when it can be given, and how it must be requested. 
It further requests regulations regarding access to records generated 
in countries of origin.
    Response: We are making no change in response to these comments. 
Under section 401(c) of the IAA, access to adoption records is governed 
by State law, including State law on costs and timing of access to 
adoption records. Laws governing specific issues related to access to 
adoption records vary from State to State. Access to Convention records 
will be governed by applicable Federal law, including the FOIA and the 
Privacy Act.
    8. Comment: Several commenters were confused about whether 
Sec. Sec.  96.42(c) and (d) of the proposed rule, regarding disclosure 
of information and protection of privacy, were meant to preempt State 
laws on disclosure. Some commenters worried that these sections were 
creating a Federal law on access to information about adoptees' and 
birth parents' identities. Of those commenters, several were concerned 
that Sec.  96.42(c) did not adequately protect the privacy of adoptees, 
birth parents, and prospective adoptive parent(s). Others were 
concerned that Sec.  96.42(d) would inappropriately block access to 
adoption records.
    Response: Section 96.42(c) in the proposed rule was not meant to 
preempt State laws regarding disclosure, privacy protection, or access 
to adoption records or other information. The proposed rule standard 
specifically referenced applicable State law. Likewise, Sec.  96.42(d) 
in the proposed rule was not intended to change applicable State law on 
access to adoption records or to block access to adoption records by 
birth parents, adoptees, or adoptive parents otherwise permitted by 
State law.
    To clarify and avoid confusion, however, we have deleted proposed 
Sec. Sec.  96.42(c) and (d) from the final rule, with the exception of 
the requirement that the agency or person ``safeguards sensitive 
information,'' which is a standard required by IAA section 
203(b)(1)(D)(iii). This standard has been relocated to Sec.  96.42(c) 
of the final rule (Sec.  96.42(e) of the proposed rule). Agencies and 
persons must still comply with applicable State law on access to 
adoption records. Consistent with this, Sec.  96.42(a) clearly defers 
to applicable State law as the basis for the standard for retaining and 
archiving adoption records.

Section 96.43--Case Tracking, Data Management, and Reporting

    1. Comment: A commenter agrees with the principle of requiring 
reports by primary providers. The commenter also believes that 
requiring annual reports would be too costly and time consuming. It 
requests that these reports be submitted every two years instead.
    Response: Section 104 of the IAA requires the Department to submit 
an annual detailed report including the data outlined in Sec.  96.43 of 
this regulation. The information collected by the primary providers, 
and provided to the accrediting entity or Department, is used to 
fulfill the Department's responsibilities under the IAA. Therefore we 
have not changed the requirement for agencies and persons to report on 
the elements in Sec.  96.43 on an annual basis.
    2. Comment: One commenter suggests that agencies and persons be 
required to report on the ethnicity of the child and birth parents for 
cases involving children immigrating to the U.S. and those emigrating 
from the U.S.
    Response: Section 104 of the IAA lists the required data to be 
collected and reported by the Department regarding Convention (and in 
some cases non-Convention) adoptions. The language of Sec.  96.43 of 
these regulations generally mirrors the data requirements in the IAA. 
The IAA has no requirement to report the ethnicity of the child or the 
birth parents, and we are unconvinced of the need for such a 
requirement. In the interests of reducing reporting burdens on agencies 
and persons, we decline to insert such a requirement into these 
regulations.
    3. Comment: A commenter suggests that, for every child emigrating 
from the United States, an agency or person be

[[Page 8103]]

required to provide a statement that the placement is being made in 
compliance with the Indian Child Welfare Act and either that the child 
is not a Native American or that the tribe has been notified and 
permission for an out-of-country placement has been received.
    Response: There is already a requirement that agencies and persons 
comply with all applicable requirements of the Indian Child Welfare 
Act, in Sec.  96.54 of these regulations. The accrediting entity will 
determine the documentation necessary to evaluate compliance with this 
standard. We have not specified that compliance with this particular 
standard will be established by a written statement; as with all of the 
standards, the accrediting entity will decide what documentation and 
information is necessary to measure compliance.
    4. Comment: A commenter believes that information about disruptions 
and dissolutions should be tracked regardless of whether a child is 
subsequently placed with another family in another country or in the 
United States.
    Response: We are making no change in response to this comment. 
Section 96.43 already requires an agency or person to provide 
information on disrupted adoptions regardless of whether a child is 
placed with another family. Agencies and persons are required to 
provide the same information on dissolved adoptions wherever possible. 
The Department has qualified the requirements for tracking information 
on dissolved adoptions with the phrase ``wherever possible'' because we 
recognize that agencies and persons may not be able easily to get 
information about what happens to a child after an adoption is 
completed.
    5. Comment: A commenter believes a child's records should include 
the name of the individual(s) who performed the home study for the 
prospective adoptive parent(s).
    Response: The IAA does not require the name of the individual who 
performed the home study to be included in a child's records, and the 
Department does not believe it is necessary to impose such a rule.
    6. Comment: Two commenters believe agencies and persons should 
report if they have ever operated under a different name or if their 
principals have ever worked with different agencies or persons.
    Response: Agencies and persons are required to provide information 
about operations under different names pursuant to Sec. Sec.  96.32 and 
96.35 of these regulations. Section 96.32(e) requires agencies and 
persons to disclose to the accrediting entity if directors, managers, 
or employees previously worked with other providers of adoption 
services. In addition, we have added to Sec.  96.35(c)(5) a standard 
that agencies and persons must report if their individual officers, 
directors, or employees are known to have been or currently are 
carrying out activities that are inconsistent with the principles of 
the Convention. It is, therefore, unnecessary to have a similar 
reporting requirement in Sec.  96.43.

Service Planning and Delivery

Section 96.44--Acting as Primary Provider

Section 96.45--Using Supervised Providers in the United States

Section 96.46--Using Providers in Convention Countries

    1. Comment: Most commenters have strong reactions to the 
regulations governing the responsibilities of primary providers. Many 
commenters believe that requiring primary providers to assume 
responsibility for the actions of supervised providers--both U.S. and 
foreign--would prove to be unworkable. On the other hand, other 
commenters believe that making primary providers liable for the actions 
of supervised providers, if those actions were negligent, is essential 
to ensuring the protection of children, birth parents, and adoptive 
parents. Numerous commenters believe that the liability provisions in 
Sec. Sec.  96.45 and 96.46 of the proposed rule should be stricken. 
Many of the commenters support the regulations as a framework for 
working with supervised providers, absent the liability provisions. 
Commenters state in particular that assigning liability to a single 
primary provider places an unmanageable financial burden on agencies 
and persons who serve as primary providers. Other commenters believe 
that small agencies and social workers who would serve as supervised 
providers will be forced out of practice because primary providers will 
be unwilling to accept legal responsibility for their work.
    Several commenters recommend that, if the final regulations contain 
liability provisions, the Department should limit liability through 
caps on damages, limits on attorney fees, the imposition of a statute 
of limitations in Convention cases, and a realistic standard of proof 
for agencies in Convention cases. Other commenters recommend that the 
regulations provide for liability exemptions for primary providers who 
can demonstrate ``due diligence'' in the selection and oversight of 
their supervised providers. Many commenters assume that the liability 
provisions impose a strict liability scheme and exceed the statutory 
authority provided in the IAA. There are some commenters who support 
the liability provisions in the regulations, however. These commenters 
request that the section remain unchanged. Some commenters would like 
primary providers to be required to treat entities accredited by 
Convention countries as supervised providers.
    Response: The Department has addressed, at section III, subsection 
B.4 of the preamble, above, these comments and its decision to remove 
the provisions of the proposed rule that required the primary provider 
to retain legal responsibility for the adoption services provided by, 
and assume liability for, its supervised providers. Consistent with 
that discussion, the Department has deleted proposed rule provisions 
Sec. Sec.  96.45(b)(8), 96.45(c), 96.45(d), 96.46(b)(9), 96.46(c), and 
96.46(d). The regulations as now revised are in no way intended to 
allocate the risk of tort liability between a primary provider and a 
supervised provider. Instead, they focus on the primary provider's 
responsibility, in the accreditation/approval context, for the actions 
of its supervised providers to the extent that such actions reveal the 
primary provider's non-compliance with a specific standard under 
Sec. Sec.  96.45 or 96.46 (a) or (b).
    As explained above, at section III, subsection B.4 of the preamble, 
although we have removed the provisions requiring primary providers to 
assume legal responsibility for the actions of their supervised 
providers, we have expanded the types of providers that primary 
providers must supervise. The Department has revised Sec.  96.14 to 
require a U.S. accredited agency or approved person acting as a primary 
provider to treat other U.S. accredited agencies and approved persons 
providing services on the case in the United States as supervised 
providers (Sec.  96.14(b)(1)), and to treat foreign entities accredited 
by a Convention country as supervised providers (Sec.  96.14(c)(2)) 
unless they are performing a service qualifying for verification under 
Sec.  96.46(c). The Department believes that holding primary providers 
responsible through the accreditation/approval process for accredited 
providers assisting with a case will provide an incentive to the 
primary partner to choose any provider partner carefully, offsetting 
the deletion of the requirement allocating legal responsibility for the 
conduct of supervised providers to the primary provider.

[[Page 8104]]

    In addition, the Department has added language to Sec.  96.46(a)(5) 
that requires a primary provider to ensure that a foreign supervised 
provider is accredited in the Convention country in which it operates, 
if accreditation is required by the laws of that Convention country to 
perform the adoption services the foreign supervised provider is 
providing.
    As explained in section III, subsection A above, Sec.  96.46(c) now 
recognizes that contemporaneous supervision by a U.S. accredited agency 
or approved person will generally not be possible with respect to a 
limited number of services performed in Convention countries--obtaining 
consents and preparing child background studies in incoming cases 
(child immigrating to the United States), and preparing home studies in 
outgoing cases (child emigrating from the United States)--and 
accordingly allows the U.S. primary provider the option of verifying 
after the fact that such services were obtained in accordance with 
applicable foreign law and the Convention. At a minimum, such steps 
will require review of the relevant reports and documentation to 
ascertain that applicable requirements have been satisfied. Section 
96.44 has also been revised to conform to this change in Sec.  96.46.
    Overall, the modifications that the Department has made to the 
regulations do not change the basic framework that was set up in the 
proposed rule. Agencies and persons acting as primary providers will 
continue to be responsible for monitoring the compliance of supervised 
providers and the accreditation and approval process will serve as a 
check on this responsibility. Primary providers will not, however, be 
required by these regulations to assume legal responsibility for the 
acts of their supervised providers. The Department believes this 
structure will promote compliance with the Convention, the IAA, and 
these regulations, without making it prohibitively difficult for 
accredited agencies and approved persons to work with other agencies 
and persons in the United States or with providers in Convention 
countries.
    2. Comment: Several commenters maintain that the indemnification 
provisions outlined in Sec. Sec.  96.45(d) and 96.46(d) do little to 
protect the primary provider. Some commenters state that the primary 
provider could be out of business before it has the chance to seek 
indemnification against the supervised providers. Commenters also 
contend that many supervised providers would not have the resources to 
fulfill the indemnification obligation.
    Response: As explained above, the Department has removed the 
requirements that primary providers assume legal responsibility for the 
actions of the supervised providers operating under their supervision. 
Therefore, the regulations' indemnification standards are no longer 
necessary, and the Department has deleted Sec. Sec.  96.45(d) and 
96.46(d).
    3. Comment: Several commenters point out that prospective adoptive 
parent(s) decide which agencies and persons to use for certain adoption 
services. For instance, prospective adoptive families often complete a 
home study before they even approach an agency. Commenters request that 
the supervision provisions be modified to reflect such situations.
    Response: The Department understands the concern about providers 
selected by prospective adoptive parent(s). Under this rule, however, 
an accredited agency, temporarily accredited agency, or approved person 
will have to be identified and act as the primary provider in each 
Convention case. This primary provider, as identified under Sec.  
96.14, is responsible for the provision of adoption services in the 
case as provided in Sec.  96.44. Providers who do not comply with this 
framework will not be able to provide services to prospective adoptive 
parent(s).
    With respect to prospective adoptive parent(s) in the United States 
who have a home study completed before choosing a primary provider, if 
the home study was prepared by an exempted provider, the primary 
provider will be required to ensure that the home study is approved 
consistent with Sec.  96.47(c). The same is true with regard to 
exempted providers performing child background studies.
    With respect to child background and home studies prepared in 
Convention countries, Sec. Sec.  96.44 and 96.46(c) will allow the U.S. 
primary provider to verify the performance of the service, as discussed 
above at section III, subsection A, and in response to comment one 
above.
    4. Comment: Two commenters point out that the term ``supervised'' 
has ramifications for agencies and persons because of the distinctions 
made by the Internal Revenue Code between employees and independent 
contractors. The commenters request that this differentiation be 
reflected in the final regulations. The commenters also request that 
the regulations clarify that they do not prevent an agency or person 
from employing an independent contractor.
    Response: The Department does not intend the use of the IAA term 
``supervised'' to determine the treatment of any individual or entity 
under the U.S. Internal Revenue Code. Supervised providers may be 
independent contractors. For Convention and IAA purposes only, a 
supervised provider is an agency or person that is providing adoption 
services under the supervision and responsibility of an accredited 
agency, temporarily accredited agency, or approved person that is 
acting as the primary provider in the Convention case. The term 
``supervised provider'' is too deeply embedded in these regulations to 
warrant devising a different term to avoid a misperception that the 
term has any implications for tax purposes.
    5. Comment: A commenter recommends that the regulations require 
primary providers to be directly responsible for all fee issues.
    Response: The Department appreciates the concern that some 
supervised providers will charge additional and undisclosed fees to 
prospective adoptive parent(s) when working directly with the 
prospective adoptive parent(s). The regulations, as written, should 
help to control this problem, because the standards in both Sec.  96.45 
and Sec.  96.46 impose specific requirements for fee-related provisions 
that must appear in the written agreement between the primary and 
supervised provider. Section 96.46(b)(8), for example, requires that 
the written agreement between the primary provider and the foreign 
supervised provider specify that, if the foreign supervised provider is 
billing the client(s) directly for their services, it must give the 
client(s) an itemized bill of all fees and expenses to be paid, with a 
written explanation of how and when such fees and expenses will be 
refunded if the service is not completed, and must make any refunds 
within sixty days of the completion of delivery of services.
    6. Comment: Several commenters were concerned about the practices 
of some foreign providers who work with birth parents in the country of 
origin.
    Response: Protecting the rights of birth parents to consent to an 
adoption is an important principle of the Convention. The primary 
responsibility for ensuring that consents have been obtained in 
compliance with the Convention is on the country of origin, however, 
not on the receiving country. The standards in Sec.  96.46 require 
primary providers to supervise the actions of their foreign supervised 
providers, including by requiring the foreign supervised provider to 
adhere to the standard in Sec.  96.36(a) prohibiting

[[Page 8105]]

child buying, or, if the consents were not obtained by a foreign 
supervised provider, by verifying that consents obtained by any other 
foreign non-governmental provider have been obtained in accordance with 
the Convention and applicable foreign law. We do not have authority, 
however, to regulate foreign providers directly, and there are limits 
to how much we can control the consent process abroad consistent with 
the framework of the Convention. We believe the approach taken in the 
regulations strikes the correct balance.

Standards for Cases in Which a Child Is Immigrating to the United 
States (Incoming Cases)

Section 96.47--Preparation of Home Studies in Incoming Cases

    1. Comment: One commenter requests that the regulations permit only 
accredited agencies or approved persons to conduct home studies.
    Response: Section 201(b) of the IAA specifically allows non-
accredited agencies and non-approved persons, known as exempted 
providers, to conduct home studies, as well as child background 
studies, in the United States, without being supervised. Exempted 
providers may prepare home studies and child background studies without 
being accredited, approved, or supervised as long as they are not 
currently providing, and have not previously provided, any non-exempt 
adoption services in the case. Home studies and child background 
studies conducted by exempted providers must be reviewed and approved 
by an accredited agency or temporarily accredited agency, however. 
Because the IAA provides clear guidance on this issue, and our 
regulations are consistent with the IAA, no change to the regulation is 
appropriate.
    2. Comment: One commenter would like the regulations to eliminate 
the need for prospective adoptive parent(s) to disclose misdemeanors 
that are over ten years old and that do not involve abuse. Another 
commenter requests that the regulations state the length of time for 
which a home study will be valid as well as describe the renewal 
process for a home study. One commenter recommends that the regulations 
allow any home study preparer to prepare a second home study for the 
competent authority in the child's country of origin that is different 
from the home study sent to DHS. The commenter notes that certain 
disclosures, like medical conditions or disabilities, can put 
prospective adoptive parent(s) at risk of rejection in a particular 
country or origin. A commenter believes that deliberate omissions of 
unfavorable information on a home study should be grounds for denial of 
accreditation or approval.
    Response: Although we understand the concerns of the commenters 
regarding the content of home studies, we do not have the authority to 
make the suggested changes in these regulations. The Department has 
authority over the accreditation and approval of agencies and persons. 
DHS retains the authority to determine the content of a home study for 
Convention and non-Convention cases. We cannot remove requirements, 
such as the required disclosures of misdemeanors, from DHS regulations 
through these regulations.
    These accreditation and approval regulations do not address the 
length of time that a home study is valid. The length of time that a 
home study remains valid is set by DHS. Therefore, we reference DHS' 
regulations, 8 CFR 204.3(e), which lay out the current requirements for 
a home study in intercountry adoptions. The home study requirements for 
intercountry adoptions can be found on the Web site of DHS's U.S. 
Citizen and Immigration Services, at http://www.uscis.gov.
    As for the issue of preparing two home studies--one for the DHS 
process and one for the country of origin--under Sec.  96.47(d) the 
preparation of two different home studies is not permitted. The United 
States will base its Convention Article 5(a) determination about the 
suitability of the prospective adoptive parent(s) in reliance on a home 
study. We believe it would be inappropriate for the United States to 
support a process whereby the receiving country would make that 
determination based upon one home study and then have the country of 
origin's decision based upon a different home study.
    3. Comment: A commenter is concerned about the disclosure of 
criminal history information to individuals not currently authorized 
under State law to conduct criminal background checks for home studies. 
It requests clarification that only individuals authorized under State 
law can conduct criminal history background reviews.
    Response: Sections 96.47(b) and 96.47(c)(1) require that home 
studies must be performed in accordance with 8 CFR 204.3(e) and 
applicable State law. Therefore, only individuals authorized under 
State law may conduct criminal history background reviews for a home 
study. See comment 9 on Sec.  96.35, for further discussion of this 
issue.
    4. Comment: One commenter believes that the Interstate Compact on 
the Placement of Children (ICPC) needs to be addressed in the 
regulations concerning home studies.
    Response: We have chosen not to add compliance with the ICPC as a 
specific standard. To the extent ICPC requirements relevant to 
intercountry adoptions are incorporated into applicable State law, 
agencies and persons will be required to comply with them.

Section 96.48--Preparation and Training of Prospective Adoptive 
Parent(s) in Incoming Cases

    1. Comment: One commenter states that the regulations should 
clarify that only agencies or persons--not prospective adoptive 
families--have the authority to decide whether prospective adoptive 
parent(s) should be available for the exemption from training outlined 
in Sec.  96.48(g). Another commenter supports the ability of parents 
who have adopted before to ``opt-out'' of the training. Other 
commenters believe that families should not be exempted from all the 
training.
    Response: We have changed the language of Sec.  96.48(g) to clarify 
that it is the agency or person that determines whether prospective 
adoptive families can be exempted from the training. We expect agencies 
and persons to comply with Sec.  96.48(g) and to evaluate prospective 
adoptive parent(s) to assess whether they have received adequate prior 
training or have prior experience as parent(s) of children adopted from 
abroad.
    2. Comment: Many commenters express support for mandatory training 
for prospective adoptive parent(s), including the variety of training 
methods that are provided for by the regulations. One commenter 
recommends a minimum of twenty hours of pre-adoptive training for 
adoptive families. Other commenters believe pre-adoption training for 
prospective adoptive families should be voluntary. They are concerned 
about any additional costs or burdens to prospective adoptive 
parent(s). Some commenters recommend that training of prospective 
adoptive families should be interactive and not rely solely on videos, 
computers, or other distance learning methods. Another commenter 
suggests that the Department require prospective adoptive parent(s) to 
participate in ``adoption playgroups,'' so that prospective adoptive 
parent(s) and adoptive parents can educate each other and benefit from 
each other's experience. One commenter suggests that the regulations 
require agencies and

[[Page 8106]]

persons to conduct at least half of the training in person. Another 
commenter requests that the regulations require an independent licensed 
social worker to conduct the training.
    Response: The IAA requires standards for an agency or person to 
provide a training program to prospective adoptive parent(s). We 
believe that Section 96.48(a)'s standard, that agencies and persons 
provide at least 10 hours of training to prospective adoptive 
parent(s), is appropriate and decline to change the hour requirement. 
Agencies and persons can exempt parents only as provided in Sec.  
96.48(g).
    The standards in Sec.  96.48(d) give agencies and persons latitude 
to design training sessions and materials based on the needs of the 
prospective adoptive family. We are not persuaded that we should 
restrict their flexibility in this regard or by requiring that only an 
independent licensed social worker be permitted to conduct the 
training. Finally, the IAA does not authorize the Department to require 
prospective adoptive parent(s) to participate in play groups, or other 
adoption support groups.
    3. Comment: Several commenters remark that mandatory training 
places too heavy a financial and personnel burden on small agencies or 
persons. They suggest that the issues to be covered in the mandatory 
training be provided during the home study process. One commenter would 
like the agency or person who conducts the home study to determine how 
much additional training is necessary.
    Response: Section 96.48(d)(5) specifically allows an extended home 
study process in cases where training cannot otherwise be provided. We 
decline to change the rules to make the home study preparer determine 
how many hours of additional training is necessary. Within the basic 
limits set in the regulations (ten hours), we want to give agencies and 
persons the discretion to make the necessary determinations about the 
training needs of prospective adoptive parent(s).
    4. Comment: Commenters' suggestions for additions to the required 
adoptive families training curriculum include information about racial 
identity issues, general parenting skills, child development, the 
potential for children to have or develop mental illnesses, the risk 
that children may have a communicable disease, and legal recourse for 
parents after adoption. One commenter is concerned that the curriculum 
will ``scare'' families away from adoption. Two commenters believe that 
the curriculum needs to be tailored for each prospective adoptive 
family. One commenter requests that the term ``institutionalized 
children'' be replaced.
    Response: We agree that the training curriculum needs to be 
tailored according to the needs of the prospective adoptive family. The 
additional suggested topics are generally already encompassed by the 
broad list of topics that training should address in Sec.  96.48(b). We 
have added some additional items that should be included in the 
training required under Sec.  96.48(c), however, to ensure that the 
prospective adoptive parent(s) are as fully prepared as possible for 
the adoption of a particular child. Section 96.48(c)(3) now requires 
parents to be counseled on any ``medical, social, background, birth 
history, educational data, developmental history, or any other data 
known about the particular child.''
    We believe the need to ensure that families be adequately prepared 
for an adoption outweighs any concern that the curriculum will 
discourage families from adopting. Finally, while the term 
``institutionalized children'' may carry a negative connotation, it is 
used in this context to encompass the broad array of childcare centers, 
programs, and institutions, such as orphanages, that are typically used 
by countries of origin, not to suggest involuntary commitment to a 
mental health or other facility. We decline to change the term, because 
we believe it is appropriate in this context to ensure that training is 
inclusive of issues related to children in a wide variety of centers, 
programs, and institutions.
    5. Comment: Several commenters suggest that agencies or persons 
should be required to provide post-adoption training and counseling.
    Response: Section 203(b)(1)(A)(iii) of the IAA requires standards 
under which agencies and persons provide training programs to 
prospective adoptive parent(s) before the parents travel to adopt the 
child or before the child is placed with the parents. While we agree 
that post-adoption training and counseling may also be very helpful for 
some parents, post-adoption services are not services that are 
regulated under the IAA. Thus we are not making changes in response to 
these comments.
    6. Comment: Two commenters would like the regulations to require 
agencies or persons to offer training to birth parents in countries of 
origin as well as to prospective adoptive families.
    Response: Neither the IAA nor the Convention requires a receiving 
country to provide training to birth parents residing in a Convention 
country. Under Article 4(c)(1) of the Convention, the country of origin 
is required to ensure that counseling is provided to the birth parents. 
When the child is emigrating from the United States, we require 
agencies and persons in Sec.  96.53 to counsel birth parents about the 
effects of their consent to an adoption. We certainly encourage 
agencies and persons to undertake voluntarily the task of providing 
needed services to birth families in other countries of origin, if they 
are permitted to do so by the country of origin. We do not believe it 
would be appropriate to address such services in these regulations, 
however.

Section 96.49--Provision of Medical and Social Information in Incoming 
Cases

    1. Comment: Many commenters maintain that the regulations require 
far more medical information to be provided than can be reasonably 
obtained. The commenters are concerned with overburdening and harassing 
foreign orphanages and doctors to the point where they will refuse to 
provide the medical information. They also worry that requesting too 
much information will cause delays in the adoption process. Commenters 
suggest that agencies and persons be required to use ``reasonable 
efforts'' to obtain medical information on a child. Many other 
commenters, however, request that the regulations force agencies and 
persons to provide comprehensive medical information. They maintain 
that access to accurate and comprehensive information about the child 
is essential for prospective adoptive parent(s). These commenters ask 
for stringent standards regarding medical and social information in 
incoming cases. Still other commenters believe that the regulations as 
written strike an appropriate balance between the two concerns.
    Response: The Department has retained the basic structure of Sec.  
96.49, but made a number of changes to specific provisions in response 
to these comments. The Department recognizes that the provision of 
accurate medical records on the child is one of the most important 
issues facing prospective adoptive parent(s), adoptive parents, and 
adoptees, but an agency or person is generally dependent upon the 
country of origin to provide such information. It has tried to balance 
the need for detailed and accurate medical information about a 
particular child with the practical difficulties inherent in obtaining 
such information in many foreign countries. The Department has 
supplemented the IAA-mandated timeframes for the provision of medical 
records by adding to the standard in

[[Page 8107]]

Sec.  96.49(a) that such records be provided to prospective adoptive 
parent(s) as soon as possible. We have also revised and reorganized 
Sec. Sec.  96.49(a) and (b) to clarify that those translations of 
medical records it is practicable to provide must be provided within 
the IAA-mandated timeframes.
    The Department has maintained the requirements, in paragraphs (d) 
and (f), that agencies and persons use reasonable efforts to provide 
the required information. We have added, to Sec.  96.49(d)(2), a 
provision that agencies and persons must try to obtain information on 
any special needs of the child. The Department has also added a 
standard to paragraph (g) calling for agencies and persons to continue 
to use reasonable efforts until the adoption is finalized to secure 
those medical or social records that could not be obtained previously.
    Overall, the standard continues to reflect the Department's belief 
that it is critical that prospective adoptive parent(s) get as much 
medical information as possible, but also provides the flexibility 
necessary in light of the practical problems inherent in providing 
prospective adoptive parent(s) with medical records.
    2. Comment: A commenter requests that the regulations more heavily 
emphasize providing birth family history. It requests that the 
following information on the child be included in the medical report: 
birth family bio-psychosocial history, growth data, prenatal history, 
development status at the time of referral, specific information on 
known health risks where the child resides, any known siblings, and the 
whereabouts of siblings. Another commenter requests that agencies and 
persons be responsible for administering basic testing for communicable 
diseases. Two commenters request that agencies and persons be required 
to use standardized medical health and social history forms.
    Response: The Department has amended several provisions of Sec.  
96.49 to require more specific information on the child's birth 
history, if available. In particular, Sec.  96.49(f)(1) now 
specifically requires reasonable efforts to obtain available 
information about the child's birth and prenatal history. The 
Department has added a new standard, Sec.  96.49(f)(3), that requires 
reasonable efforts to obtain available information about any birth 
siblings, including their whereabouts, whose existence is known to the 
agency or person or its supervised provider. The Department has also 
revised Sec.  96.49(d)(3) to require reasonable efforts to obtain 
available growth data, including prenatal and birth history, and 
developmental status over time and current developmental data at the 
time of the child's referral for adoption. Section 96.49(d)(4) 
continues to require reasonable efforts to obtain available specific 
information on the known health risks in the specific region or country 
where the child resides.
    The regulations do not require agencies and persons to administer 
tests for communicable diseases. The Department believes that the 
correct role for agencies and persons, most of whom do not have staff 
with medical training, is to gather and forward as much medical and 
social information about the child as is reasonably possible, not to 
perform medical diagnostic tests themselves. Also, the Department is 
not requiring agencies and persons to use standardized health and 
social history forms. The governmental interest is in having agencies 
and persons get as much information about the child's medical and 
social history to the prospective adoptive parent(s) as possible, not 
in the format of the information.
    3. Comment: Several commenters request that agencies and persons be 
granted the discretion to withdraw referrals of a child in less than a 
week if necessary in order to shorten the amount of time a child spends 
waiting to be adopted. They believe 48 to 72 hours is appropriate. 
Other commenters suggest a three-week review period, while others 
request establishing a two-week review period. In addition, several 
commenters request that the regulations be modified to more 
specifically lay out what ``extenuating circumstances'' would be 
appropriate exceptions to the one-week review period. Others request 
that the exception for ``extenuating circumstances'' be omitted.
    Response: The Department has amended Sec.  96.49(k) to require the 
accredited agency or approved person to give the prospective adoptive 
parent(s) at least two weeks, instead of one, to review the referral. 
In making this change, the Department is seeking to ensure that 
prospective adoptive parent(s) have enough time to make an informed, 
measured decision, using the specific medical and social history of the 
child they wish to adopt, that they are capable of properly caring for 
the child. We have retained the provision that permits the referral to 
be withdrawn earlier, however, to provide flexibility to agencies and 
persons in the rare cases in which there are extenuating circumstances 
involving the child's best interests.
    4. Comment: A commenter requests the inclusion of language to allow 
for adoptions of children who have not been pre-identified in advance 
of travel.
    Response: The language of Sec.  96.49(a) reflects section 
203(b)(1)(A)(i) of the IAA, which requires medical records to be given 
to the prospective adoptive parent(s) no later than two weeks before 
the adoption or two weeks before the date on which the prospective 
adoptive parent(s) travel to the Convention country to complete all 
procedures relating to the adoption, whichever is earlier. We think 
this requirement is best read to apply only once a child has been 
identified and matched with the prospective adoptive parent(s). Prior 
to that time, there is no specific ``adoption'' contemplated, and any 
travel cannot be to complete all procedures relating to a particular 
adoption. We do not believe this standard was intended or must be read 
to preclude adoptions of children who have not been pre-identified 
prior to travel, and we do not believe it is necessary to change Sec.  
96.40(a) or to add a new standard to address this issue. If the 
prospective adoptive parent(s) have not been matched with a child 
before arriving in the country of origin, then compliance with the 
standard in Sec.  96.49 will require that medical information on the 
child be provided to the prospective adoptive parent(s) either as soon 
as possible after the child is identified, but no later than two weeks 
before the adoption or placement for adoption, or--if a second trip is 
needed to complete procedures relating to the adoption--no later than 
two weeks prior to that travel, whichever is earlier.
    5. Comment: One commenter requests that agencies and persons 
provide a copy of the child's medical records to the prospective 
adoptive parent(s) at least three weeks in advance if the record is not 
a correct and complete English translation. Several commenters request 
that an untranslated copy of the prospective adoptive child's medical 
records be provided to the adoptive family in addition to the English 
versions.
    Response: The Department has amended Sec.  96.49(c) to require 
agencies or persons to provide any untranslated medical reports or 
videotapes or other reports to prospective adoptive parent(s). It 
continues to require accredited agencies and approved persons to 
provide an opportunity for the clients to arrange for their own 
translation of the records, including a translation into a language 
other than English, if needed.
    6. Comment: Several commenters request that any information 
obtained on the prospective adoptive child be obtained in accordance 
with the

[[Page 8108]]

Convention country's laws and procedures.
    Response: In Convention adoptions, the laws of both countries 
involved must be followed. These regulations will not supersede any 
applicable domestic laws of a Convention country on the collection of 
information about a prospective adoptive child, as Sec.  96.49(i) 
relating to videotapes and photographs of the child reiterates. We 
believe this is sufficiently clear from the standards in their entirety 
that no specific change is required in response to these comments.
    7. Comment: A commenter believes that it is unnecessary to require 
a non-medical individual to document his or her training and to 
indicate whether or not he or she relied on objective data or 
subjective perceptions in making a medical assessment.
    Response: The Department believes that it will help the prospective 
adoptive parent(s) better understand the information they are given 
about a prospective adoptive child if they know both the training and 
background of any person who contributed observations on the child, as 
well as the basis of his or her conclusions about the child. Thus, the 
Department is not deleting Sec.  96.49(e)(3). The Department has, 
however, revised the standard to require that non-medical individuals 
provide only information on what data and perceptions were used to draw 
conclusions. The Department agrees that requiring an additional level 
of specification as to whether the individual relied on objective data 
or subjective perceptions in making the assessment is unnecessary.
    8. Comment: Several commenters request that the standard in Sec.  
96.49(e), which sets out specific requirements for medical information 
provided by the agency or person, apply only if the agency or person 
provides medical information that is not the medical information 
provided by the Convention country to the agency or person.
    Response: The Department has revised the standard at Sec.  96.49(e) 
so that it applies only when the agency or person is providing medical 
information other than the information provided by public foreign 
authorities. We recognize that the agency or person may not be able to 
insist that the public foreign authority include specific information. 
In addition, the Department has added a provision to specify that, when 
the agency or person is providing medical information covered under the 
standard, it must make ``reasonable efforts'' to provide the specific 
information required under Sec.  96.49.
    9. Comment: Several commenters believe Central Authorities, rather 
than the accredited agencies or approved persons, should be responsible 
for providing accurate medical information.
    Response: Under Article 16 of the Convention, the Central Authority 
of the country of origin, or other entities authorized to perform 
certain of its duties, must prepare a report on the child. This report 
must include information about the child's identity, adoptability, 
background, social environment, family history, and medical history 
(including that of the child's family), and any special needs of the 
child. The general medical history is just one component of the report. 
The IAA, on the other hand, requires the Department to impose very 
specific requirements regarding obtaining medical records on U.S. 
accredited agencies and approved persons. The primary purpose of Sec.  
96.49 is to implement the IAA requirements that agencies and persons 
obtain medical records and transmit them to the prospective adoptive 
parent(s).
    10. Comment: Several commenters request that videotapes be required 
only when it is possible to obtain them from the child's country of 
origin. Two commenters believe videotapes of the child should be 
translated.
    Response: The Department made a series of changes to Sec.  96.49 to 
clarify the requirements related to videotapes of the child. Section 
96.49(k) has been modified to clarify that prospective adoptive 
parent(s) must be allowed to obtain physician review of videotapes only 
if such tapes are available; this provision has not been specifically 
limited to videotapes obtained from the child's country of origin 
because the relevant question is whether a videotape is available, not 
where it is available from. The Department has also revised Sec.  
96.49(i) so that it explicitly states that an agency or person must 
ensure that videotapes and photographs of the child comply with the 
laws of the country where taken or recorded. In addition, Sec.  
96.49(c) now requires that an agency or person must provide the 
prospective adoptive parent(s) with any untranslated videotapes and an 
opportunity to translate any videotape that is provided.
    11. Comment: Some commenters believe that a detailed summary of 
medical records should normally be sufficient because original medical 
records are typically voluminous. Such commenters also request that if 
the prospective adoptive parent(s) have been given only a summary of 
the medical records, if the summary was produced by anyone other than 
the orphanage director, physician, or a person designated by the 
Central Authority of the country of origin, they should also be 
provided with the original medical records. Other commenters request 
that Sec.  96.49(a) and (b) be replaced with language that more closely 
tracks the IAA requirement for a standard that an agency or person 
provide a copy of the medical records of the child (which, to the 
fullest extent practicable, shall include an English language 
translation of such records) on a date which is not later than the 
earlier of the date that is two weeks before: (I) the adoption; or (II) 
the date on which the prospective adoptive parent(s) travel to a 
foreign country to complete all procedures in such country relating to 
the adoption. Of particular concern was the fact that the proposed 
regulation did not appear to set a timeframe for the production of an 
English translation of the medical records.
    Response: The Department recognizes that some medical records may, 
inherently, summarize or collect information based on other medical 
records, but it does not believe that the type of ``summary'' of 
original medical records that the commenters propose would suffice to 
meet the IAA requirement that a copy of the child's medical records be 
provided. While an agency or person would not be precluded from 
producing a summary of medical records on a voluntary basis for its 
clients, any such summary alone would not meet the standard in Sec.  
96.49(a), which requires production of a copy of the medical records.
    The Department has revised and restructured Sec. Sec.  96.49(a) and 
(b) to respond to the concern that the proposed rule did not set a time 
frame for the production of translations. Section 96.49(a) now clearly 
states that the medical records, including, to the fullest extent 
practicable, a correct and complete English-language translation of 
such records, must be produced within the time frames established by 
the IAA.
    Section 96.49(b) now clearly states that where any medical record 
provided is a summary or compilation of other medical records, the 
agency or person is also required to provide the underlying medical 
records, if available.
    12. Comment: Two commenters request that the phrase ``all available 
medical records'' be substituted for the phrase ``the medical records'' 
in Sec.  96.49(a) and (b).
    Response: The Department believes that this change is unnecessary, 
because Sec.  96.49 clearly establishes that the obligation is to 
provide the medical records (including any available

[[Page 8109]]

underlying medical records related to a medical record that summarizes 
or compiles information), and to make reasonable and ongoing efforts to 
obtain a wide range of additional medical information. Section 96.49(j) 
also sets a standard prohibiting withholding, or misrepresenting, any 
available medical information concerning the child.
    13. Comment: A commenter requests clarification that any State 
standards requiring a more timely and/or comprehensive disclosure of 
medical history would continue to apply to agencies and/or persons 
licensed in that State.
    Response: This regulation is not intended to preempt any applicable 
State standards that require more timely and/or comprehensive 
disclosure of medical history.
    14. Comment: One commenter believes that a U.S.-based physician 
should be required to evaluate medical information. The commenter also 
requests that the regulations require agencies and persons to provide a 
list of capable U.S. physicians who specialize in interpreting medical 
information from applicable countries of origin.
    Response: Mandating that agencies and persons retain U.S. doctors 
directly to review all medical records would be a major change in the 
current practice of intercountry adoptions. Typically, it is the 
prospective adoptive parent(s) who select and retain a U.S. physician 
to complete a review and assessment of all available information on the 
child. We see no reason to change this practice. The regulations 
requiring advance disclosure of a child's medical information to 
prospective adoptive parent(s) are designed, at least in part, to 
ensure that prospective adoptive parent(s) have enough time to have the 
child's records reviewed by a U.S. physician, if they choose to do so, 
before they agree to adopt a particular child. While it may be helpful 
for agencies and persons to provide lists of U.S. physicians who 
specialize in intercountry adoptions who may be able to interpret 
foreign medical records, we do not think it is necessary to proper 
implementation of the Convention or IAA.

Section 96.50--Placement and Post-Placement Monitoring Until Final 
Adoption in Incoming Cases

    1. Comment: Two commenters maintain that sending a guardian to 
bring a child from the country of origin should be an equally 
acceptable alternative to prospective adoptive parent(s) traveling to 
the country of origin to receive a child. They request that the words 
``and, if possible, in the company of the prospective adoptive 
parent(s)'' be deleted from Sec. Sec.  96.50(a) and 96.51(a), so as to 
avoid the implication that use of a guardian is a less desirable 
approach.
    Response: Sections 96.50(a) and 96.51(a) mirror Article 19 of the 
Convention, which states that Central Authorities shall ensure the 
``transfer takes place in secure and appropriate circumstances and, if 
possible, in the company of the adoptive or prospective adoptive 
parent(s).'' The phrase, ``if possible'' provides a degree of 
flexibility in cases in which travel with a properly trained escort 
offers an appropriate, secure alternative for transferring a particular 
child from the child's country of origin when adoptive or prospective 
adoptive parent(s) are unavailable.
    2. Comment: A commenter requests that the regulations specify who 
will assume the costs of returning the child to the country of origin 
in the case of disruption when such return is determined to be in the 
child's best interests. The commenter also suggests that for adoptions 
that are not finalized within a set period of time, there should be a 
requirement for a decision to be made whether it is in the best 
interests of the child to remain in a guardianship arrangement in the 
United States or return to the country of origin. Another commenter 
believes that, even if an adoption is disrupted, the child should never 
be returned to his or her country of origin.
    Response: The Department believes that the standards in Sec.  96.50 
adequately address the responsibility for costs of returning a child to 
the country of origin, in the case of a disruption. Section 96.50(f)(1) 
requires that the agency or person include in its adoption services 
contract with the prospective adoptive parent(s) a plan addressing who 
will have legal and financial responsibility for transferring custody 
in an emergency or in the case of impending disruption, and for care of 
the child. The contract between the agency or person and the 
prospective adoptive parent(s) should address who will assume the costs 
of returning the child to his or her country of origin and who will 
assume the costs of the child's care until the return is completed. 
Section Sec.  96.50(f)(2) also requires that the plan address the 
circumstances in which the child will be returned to the child's 
country of origin, as a last resort, if that is determined to be in the 
child's best interests. The Department believes that these provisions 
are adequate to cover the rare case in which there is a disruption and 
it is determined to be in the child's best interests to return to the 
country of origin.
    These regulations are not intended to change currently applicable 
laws, under which a State court determines whether a placement is in 
the best interests of a child before his or her adoption is finalized 
in the U.S. State court. In the event that the initial placement is 
found not to be in the best interests of the child, or is otherwise 
disrupted, Sec.  96.50(d) and (e) of the regulation establish that the 
agency or person is responsible for finding an alternate placement for 
the child.
    The Department has not changed the rule to prohibit the return of a 
child to his or her country of origin in the case of a disruption, 
because there may be instances in which such return is in the child's 
best interests. Section 96.50(e)(2) makes clear that an agency or 
person must obtain the agreement, in writing, of the Central Authority 
of the country of origin and of the Department to any such return.
    3. Comment: A commenter requests that the Department track 
adoptions that are to be finalized in the United States.
    Response: The tracking of intercountry adoptions is not within the 
scope of these regulations on accreditation/approval. Section 102(e) of 
the IAA requires the Department and DHS to jointly establish a Case 
Registry of all adoptions involving immigration of children into the 
United States regardless of whether an adoption occurs under the 
Convention. In addition, section 104 of the IAA requires the Department 
to submit an annual report to Congress that will provide information 
concerning intercountry adoptions involving immigration to the United 
States, including information on adoptions that are finalized in a U.S. 
State court. The reporting requirements set forth in Sec.  96.43 will 
assist the Department in obtaining this information and fulfilling its 
reporting obligations.
    4. Comment: Several commenters emphasize the importance of post-
placement monitoring. They express support for this section of the 
proposed regulations. One commenter would like the regulations to 
provide minimum uniform standards for post-placement monitoring.
    Response: While the Department also recognizes the importance of 
post-placement monitoring, the standards provided in Sec.  96.50 are 
straightforward and we do not believe additional changes to the 
regulations, to require additional uniformity in how post-placement 
monitoring is conducted, are required.
    5. Comment: Several commenters are concerned that adoptive 
parent(s) will not comply with the post-placement

[[Page 8110]]

monitoring (as opposed to post-adoption monitoring) requirements. For 
the protection of agencies and persons, they would like the regulations 
to provide a means for securing parental compliance with post-placement 
supervision. One commenter requests that the regulations require 
agencies and persons to notify prospective adoptive families of the 
frequency and total number of post-placement reports.
    Response: These regulations include standards on post-placement 
monitoring because post-placement monitoring is an adoption service 
under the Convention and the IAA. Their focus is necessarily on 
adoption service providers, however, not on prospective adoptive 
parent(s), who the Department recognizes may choose not to cooperate 
with an agency or person providing post-placement monitoring. While 
these regulations do not regulate prospective adoptive parent(s) 
directly, the agency or person may take into account the prospective 
adoptive parent(s)' lack of post-placement cooperation in determining 
whether it is appropriate to proceed to adoption.
    Please note that Sec.  96.50(g) only requires that the agency or 
person provide post-placement reports to the Convention country if they 
are required by the Convention country, and then only until the 
adoption of the child is final. Section Sec.  96.50(g)(1) of the 
regulations has been revised to require that prospective adoptive 
parent(s) be informed about the required post-placement reports in the 
written adoption services contract prior to the referral of the child 
for adoption. The Department expects such notice would include the 
frequency and number of post-placement reports. We are hopeful that 
this written notice will encourage prospective adoptive parent(s) to 
cooperate with the agencies or persons, because all parties will want 
to ensure that the adoption is finalized successfully.

Section 96.51--Post-Adoption Services in Incoming Cases

    1. Comment: Several commenters are concerned that parents will not 
comply with any post-adoption reporting requirements imposed by 
countries of origin. Other commenters recommend that agencies and 
persons be required to provide post-adoption reports. Still other 
commenters recommend that agencies and persons provide post-adoption 
services when the family requests such services. They suggest that 
providing post-adoption services should not be voluntary.
    Response: The Department recognizes that the potential for parents 
not cooperating with post-adoption reporting requirements is at least 
as great as the potential for non-cooperation with regard to post-
placement reporting. This issue is not appropriately addressed by 
holding agencies and persons responsible in the accredition/approval 
context for failing to produce post-adoption reports, however, 
particularly because post-adoption reporting and other services 
provided after the child's adoption are not included in the IAA's list 
of adoption services that must even be provided by an accredited agency 
or approved person, and because we are not regulating adoptive parents 
in these regulations. While Sec.  96.51(e) of the proposed rule would 
have regulated agencies and persons who voluntarily provided post-
adoption services, the Department has decided to delete the standard to 
be consistent with the general approach taken in the IAA and these 
regulations, of not regulating any post-adoption services.
    We understand that countries of origin that require post-adoption 
reports may stop working with U.S. agencies or persons or close 
adoption programs to U.S. prospective adoptive parent(s) if they cannot 
obtain the post-adoption reports. We anticipate that this issue will be 
addressed, however, by all providers and parents working cooperatively 
together in the understanding that doing so benefits all concerned, 
including persons who hope to adopt in the future.
    2. Comment: A commenter recommends that Sec.  96.51(a) be deleted 
because it is redundant with Sec.  96.50(a). The commenter also 
recommends that Sec.  96.51(c) and Sec.  96.50(c) be switched.
    Response: Post-placement monitoring is the subject of Sec.  96.50, 
whereas Sec.  96.51 deals with post-adoption services. Thus it is not 
appropriate to switch Sec. Sec.  96.51(c) and 96.50(c), or to delete 
Sec.  96.51(a). For an explanation of the differences between post-
placement monitoring and post-adoption services, please see the 
response to comments on Sec.  96.2 in subpart A.
    3. Comment: A commenter believes the Central Authority in the 
country of origin should be notified if an adopted child is re-placed 
with another family in the United States after a disruption.
    Response: Section 96.50(f)(4) requires agencies and persons to 
include in their written adoption services contract with the 
prospective adoptive parent(s) a plan describing, among other things, 
how the Central Authority of the child's country of origin and the 
Department will be notified if there is a disruption in the United 
States before final adoption.
    4. Comment: A commenter requests that the regulations require 
agencies and persons to be responsible for placement of a child within 
an identified time frame after a dissolution takes place.
    Response: The Department is not changing the rule to mandate that 
agencies or persons take actions after a dissolution takes place. 
Adoption services provided after dissolution are post-adoption 
services, which are outside the scope of these regulations. While both 
the IAA and the Convention contain provisions dealing with disruptions, 
which occur before an adoption is finalized, neither mandates any 
behavior with respect to dissolutions (other than reporting, whenever 
possible). The Department has tried to be consistent in not regulating 
post-adoption services in these regulations on accreditation/approval. 
Therefore, Sec.  96.51(b) requires only that the agency's or person's 
adoption services contracts with prospective adoptive parent(s) inform 
the parents whether services will be provided if the adoption is 
dissolved and, if so, include a plan describing the responsibilities of 
the agency or person upon a dissolution.
    We recognize that this may be unsatisfactory for State child 
welfare authorities faced with finding placements for children from 
dissolved intercountry adoptions. This rule is not intended to change 
any applicable State child welfare or protection law, however, or any 
applicable State law on the financial responsibility of parents for the 
post-dissolution care of the child. We note also that section 205 of 
the IAA amended section 422(b) of the Social Security Act, 42 U.S.C. 
622(b) to require States to collect and report information on children 
who enter into State custody because of the disruption of a placement 
for intercountry adoption or the dissolution of an intercountry 
adoption. Thus, it should be possible in the long run to monitor 
disruptions and dissolutions and to evaluate any problems they are 
creating.

Section 96.52--Performance of Hague Convention Communication and 
Coordination Functions in Incoming Cases

    1. Comment: A commenter believes that it is unreasonable for an 
agency or person to keep the Central Authority of the Convention 
country and the Department continuously informed about the adoption 
process.
    Response: The Department has amended Sec. Sec.  96.52(a) and 
96.55(a) to clarify that an agency or person must keep the Central 
Authority of the Convention country and the Department

[[Page 8111]]

informed about the adoption process only as necessary. So, for example, 
if regulations outside this Part, such as visa regulations, require an 
agency or person to provide information to the Department about the 
completion of a particular step in the adoption process, this standard 
ties the agency's or person's accreditation status to compliance with 
the other regulation. We believe this clarification will reduce any 
undue burden on agencies or persons.
    2. Comment: A commenter suggests that Sec.  96.52(e) be deleted 
because it is too vague and presents a federalism issue. Section 
96.52(e) requires the agency or person to take appropriate measures to 
perform any tasks in a Convention adoption case that the Department 
identifies are required to comply with the Convention, the IAA, or any 
regulations implementing the IAA.
    Response: We have not deleted this provision because we want to 
ensure that the Department can rely upon the accredited agencies and 
approved persons to perform those tasks entrusted to them under the 
IAA's scheme for governing Convention adoptions involving the United 
States. Accredited agencies and approved persons will be notified of a 
case-specific task the Department identifies as necessary. We do not 
feel this section presents a federalism issue because the IAA gives the 
Department broad authority over Convention implementation, including 
the coordination of activities under the Convention by persons subject 
to the jurisdiction of the United States. Moreover, this rule does not 
direct state action. The States may continue to license agencies and 
persons to perform adoption-related services; where these regulations 
apply, they will be in addition to, not replacing, state regulation.

Standards for Cases in Which a Child Is Emigrating From the United 
States (Outgoing Cases)

Section 96.53--Background Studies on the Child and Consents in Outgoing 
Cases

    1. Comment: Several commenters recommend that the regulations 
require additional information to be provided in the child's background 
study. Recommendations for such additions include: a psychosocial 
evaluation, non-identifying medical and genetic information, the name 
and contact information of the physician who performed the assessment, 
and non-identifying family history. Commenters recommend that 
prospective adoptive parent(s) receive a copy of the medical records of 
the child prior to the adoption.
    Response: The Department recognizes that providing substantial 
background information on a child can be helpful for both prospective 
adoptive parent(s) and children. With such information, prospective 
adoptive parent(s) may better understand the needs of the child, and a 
child will more likely be placed in a home where his or her needs would 
be met. We nevertheless have not expanded the standard in Sec.  
96.53(a). The standard is consistent with IAA which incorporates the 
requirements of Convention Article 16, which requires information on 
the child's identity, adoptability, background, social environment, 
family history, and medical history, including that of the child's 
family, and any special needs of the child. We do not believe it is 
appropriate to make this standard more burdensome, but we note that any 
State law requirements applicable to a child background study will 
continue to apply.
    While we have not changed the substantive requirements of Sec.  
96.53(a), we have reorganized Sec. Sec.  96.53(a) and (b) to present 
the requirements more clearly. For example, it should now be clear that 
an agency or person is always responsible for ensuring that the 
information listed in Sec. Sec.  96.53(a)(1)-(3) is included in the 
child background study. We have also revised Sec.  96.53(b) to clarify 
that a supervised provider may also prepare a child background study, 
so long as any applicable review and approval requirements are met.
    Section 96.53(e) requires that the U.S. agency or person send the 
child background study to the Central Authority or other competent 
authority or accredited bodies of the receiving country. In response to 
the suggestion that the medical records of a child should be 
transmitted prior to the adoption, we have added to Sec.  96.53(e) 
language that makes it clear that the agency or person should take all 
appropriate measures to transmit the child background study before the 
child's adoption. The regulations do not prohibit a U.S. accredited 
agency or approved person from also providing the child background 
study to the prospective adoptive parent(s) directly, if consistent 
with applicable State law and the law of the receiving country.
    2. Comment: Several commenters would like the regulations to 
recommend a pre-placement visit between the child and the prospective 
adoptive parent(s), when the child is of appropriate age.
    Response: Although we understand that a pre-placement meeting 
typically makes a child feel more comfortable about the transition to 
an adoption placement, the Convention and the IAA are silent on the 
subject of requiring a pre-placement visit, and the Department does not 
believe it is appropriate to impose such an additional requirement in 
these regulations on accreditation/approval. If applicable State law 
requires a pre-placement visit, then that requirement will apply to an 
intercountry adoption of a U.S. child emigrating to a Convention 
country.
    3. Comment: Several commenters request that the minimum age for 
considering the child's wishes about the adoption be changed from ten 
to twelve years.
    Response: The Department has changed Sec.  96.53(d) in response to 
these comments, and in recognition of the fact that twelve is a widely 
accepted minimum age of consent as reflected in the Uniform Adoption 
Act, Sec.  2-401(c). Section Sec.  96.53 now provides that, unless 
State law provides a different age, if the child is twelve or older an 
agency or person must give due consideration to a child's wishes or 
opinions before determining that an intercountry adoption placement is 
in the child's best interest. While some State laws may be silent on 
this question, we believe that most States generally require a child's 
wishes must be considered at an age between 10 and 14 years.
    4. Comment: A commenter recommends that the regulations require 
consent from both birth parents, not just the birth mother.
    Response: The Department is not changing Sec.  96.53(c) in response 
to these comments, because Sec.  96.53 of the regulations reflects the 
language of Article 4 of the Convention on consents. The Department 
does not want to impose any requirements for consents in addition to 
those required specifically under the Convention and IAA. Section 
96.53(c), consistent with Article 4, requires that the consent of any 
persons whose consent is necessary for the adoption has been obtained. 
Accordingly, in any case in which State law requires the consent of the 
birth father, in addition to that of the birth mother, Sec.  96.53(c) 
would require that the consent of both birth parents be obtained.
    5. Comment: One commenter would like the phrase ``takes all 
appropriate measures to ensure'' found in Sec.  96.53(a) and Sec.  
96.53(c) changed to ``ensures.''
    Response: We have kept ``takes all appropriate measures to ensure'' 
in the final rule, because primary providers

[[Page 8112]]

will be working with public domestic authorities or competent 
authorities who will be performing some of the tasks required under the 
Convention to complete a Convention adoption. The primary provider is 
not responsible for the quality of a public domestic authority's or 
competent authority's services when they complete Convention tasks, as 
reflected in Sec.  96.14. Because these authorities are not accountable 
to the primary provider, it would be unfair to set a standard making 
the primary provider responsible for their actions. Agencies and 
persons are required, however, to take all appropriate measures to 
ensure that Convention tasks are conducted in accordance with the 
standards set forth in Sec.  96.53.
    6. Comment: Several commenters recommend that the regulations 
require that birth parents or other authorities whose consent is 
necessary to be counseled that their consent will result in the child 
living in a foreign country. They also recommend that the specific 
country of destination be named during the counseling.
    Response: We agree that full disclosure of the effects of consent 
is important, but we are not amending Sec.  96.53(c) in response to 
this comment. The purpose of Sec.  96.53(c) is to incorporate the 
requirements on consents set forth in Article 4 of the Convention, not 
to impose any additional specific requirements on what information must 
be provided to persons or institutions whose consent must be obtained.
    Article 4 of the Convention requires that the country of origin 
ensure that persons whose consent is required be counseled as may be 
necessary and informed of the effects of their consent, particularly 
with respect to whether an adoption will result in the termination of 
the legal relationship between the child and the birth family. The 
Convention language does not contain any additional specific 
requirements regarding the contents of the counseling, and the relevant 
IAA provision simply states that State courts with jurisdiction over a 
Convention adoption must be satisfied that the agency or person 
complied with Article 4.
    Where applicable State laws establish more specific requirements 
about the contents of counseling, the agency or person will have to 
comply with these laws in addition to the IAA. Moreover, Sec.  96.54(d) 
specifically provides that, if State law requires, agencies and persons 
must disclose to birth parents that the child will be adopted by 
parents who reside outside of the United States.
    Because the Department does not intend to create Federal consent 
requirements beyond those required under the Convention and applicable 
State law, we have removed from Sec.  96.53(c)(5) the specific 
requirement that a child be counseled and duly informed that his or her 
consent would result in the child living in another country.

Section 96.54--Placement Standards in Outgoing Cases

    1. Comment: Numerous commenters would like the regulations to make 
it more difficult to place U.S. children abroad. Some commenters 
suggest that agencies and persons should be prohibited altogether from 
placing children who are born in the United States for intercountry 
adoption. Other commenters agree that U.S. children may be placed 
overseas, but think that the standard requiring reasonable efforts to 
find a timely adoptive placement for the child in the United States is 
too vague. Another commenter notes that not all children adopted from 
the United States will be infants, and asks whether children who are 
not newborns are required to be placed on a registry for a specific 
period of time. Other commenters request that the length of time of 
listing on an adoption exchange or registry be changed from thirty to 
sixty days.
    Response: There is no basis in the Convention or the IAA for 
prohibiting U.S. children from participating in intercountry adoption. 
The Convention explicitly recognizes that intercountry adoption may 
offer the advantage of a permanent family to a child for whom a 
suitable family cannot be found in his or her country of origin. 
Article 4 of the Convention states that, after possibilities for 
placement within the country of origin have been given ``due 
consideration,'' competent authorities may determine that intercountry 
adoption is in the child's best interests.
    Accordingly, section 303(a)(1) of the IAA requires that an 
accredited agency or approved person ensure that, in a Convention 
adoption involving emigration from the United States, ``it has made 
reasonable efforts to actively recruit and make a diligent search for 
prospective adoptive parent(s) to adopt the child in the United 
States,'' and that ``despite such efforts, it has not been able to 
place the child for adoption in the United States in a timely manner.'' 
In furtherance of section 303(a)(1), Sec.  96.54(a) provides guidance 
to agencies or persons on how to satisfy the ``reasonable efforts'' 
standard. Except in special circumstances, to demonstrate that the 
reasonable efforts standard has been met, an agency or person is now 
required by Sec. Sec.  96.54(a)(1) through (4) to: (1) disseminate 
information about the child and the child's availability for adoption 
through print, media, and internet resources designed to communicate 
with potential U.S. prospective adoptive parent(s); (2) list 
information about the child on a national or State adoption exchange or 
registry for at least sixty calendar days after the birth of the child; 
(3) respond to inquiries about adoption of the child; and (4) provide a 
copy of the child background study to potential U.S. prospective 
adoptive parent(s).
    Note that, in response to several comments, the time period set out 
in Sec.  96.54(a)(2) for listing a child on a national or State 
adoption exchange or registry has been increased from thirty days to 
sixty days after the birth of the child. We believe this additional 
time will help ensure that reasonable efforts are taken to place the 
child within the United States, without unduly delaying an intercountry 
adoption if one proves to be in the best interests of the child. This 
time period remains sufficiently short to avoid harming a child by 
keeping it on a registry for an excessive period of time (a concern 
expressed by some adoption experts who testified before Congress during 
consideration of the IAA).
    Note also that the requirement to be registered for ``at least 
sixty days after the birth of the child'' applies both to newborn 
children and to older children. That is, every child must be listed for 
at least sixty days. The limitation of ``after the birth of the child'' 
is intended to preclude listing children before they are born.
    2. Comment: Some commenters recommend that children emigrating from 
the United States be provided with assurances of citizenship in their 
adopted countries.
    Response: The Department cannot control how Convention countries 
will apply their citizenship laws. Article 5 of the Convention 
provides, however, that a Convention adoption may proceed only after 
the competent authorities in the receiving country determine that the 
child is or will be authorized to enter and reside permanently there. 
Consistent with this requirement, Sec.  96.55(d)(4) requires U.S. 
agencies or persons to transmit or provide to State courts evidence 
that the child will be authorized to enter and reside permanently (or 
on the same basis as that of the prospective adoptive parent(s)) in the 
receiving country.
    3. Comment: Certain commenters believe that the regulations should 
mandate that receiving countries other

[[Page 8113]]

than the United States provide post-adoption services.
    Response: Article 9 of the Convention requires each country to 
promote post-adoption services, but there is no requirement in the 
Convention that case-specific post-adoption services be provided in a 
receiving country. The availability of these services will be 
determined by the receiving country, its adoption service providers, 
and its law. The Department does not have the authority to impose such 
a requirement on Convention countries.
    4. Comment: One commenter would like the regulations to address 
access to and retention of records in the receiving Convention country 
about U.S. children placed in that country.
    Response: The Department has no authority to impose such a 
requirement on a receiving country. Access to and retention of records 
held in a Convention country will be governed by the laws of that 
country.
    5. Comment: One commenter questions the authority of the Department 
to create or to impose on States any ``preference'' with regard to 
``best interests of the child'' in the standards.
    Response: The Department does not intend in this rule to create or 
impose new ``preferences'' that would influence States concerning the 
best interests of the child standard. Section 96.2, in defining ``Best 
interests of the child'' for the purposes of this part, specifically 
states that the term shall have the meaning given to it by the law of 
the State with jurisdiction to decide whether a particular adoption or 
adoption-related action is in the child's best interests. In this 
context, the standards require that an agency or person must determine 
that a placement is in a child's best interests, consistent with 
applicable State law on best interests of the child. Ultimately, it is 
up to the State court with jurisdiction to determine if the 
intercountry adoption meets all State law requirements and any 
applicable Convention and IAA requirements.
    6. Comment: A commenter asks where the Department finds authority 
to mandate that the agency or person use ``diligent efforts to place 
siblings together.''
    Response: Consistent with our general approach of not creating new 
Federal requirements for Convention cases involving U.S. children where 
there is not specific language in the Convention or the IAA, and in 
response to this comment, we have modified the standard at Sec.  
96.54(c)(2) to require that agencies and persons make diligent efforts 
to place siblings together ``to the extent consistent with State law.''
    7. Comment: Several commenters request that the U.S. accredited 
agency or approved person be informed if there is a disruption in an 
outgoing case. They also request that the standard address who will pay 
for the child's transportation back to the United States if returning 
the child is determined to be in the child's best interests.
    Response: The Department expects that an agency or person will 
typically remain in contact with the relevant entities in the receiving 
country as a result of its compliance with the standards set forth in 
Sec. Sec.  96.54(i)-(k), and therefore will likely be aware of any 
disruption. Article 21 of the Convention gives, however, the Central 
Authority of the receiving country the primary responsibility for 
determining when an adoptive placement is not in the best interests of 
the child. If the Central Authority of the receiving country or, where 
appropriate, another entity performing its duties, determines that 
continued placement of a child with the prospective adoptive parent(s) 
is not in the child's best interests, it will have a number of 
responsibilities to protect the child. For example, the Central 
Authority, or other entity performing its duties, will have to arrange 
for the child to be removed from the prospective placement and will 
have to arrange temporary care; and, in consultation with the Central 
Authority of the country of origin (the Department) or, as appropriate, 
other entities performing U.S. Central Authority duties under the 
Convention, it will have to arrange for a new placement in the 
receiving country. If it cannot find an alternative placement, the 
Central Authority, or other entity performing its duties, as 
appropriate, must arrange for the return of the child to the United 
States. Section 96.54(k) requires that the agency or person consult 
with the Department before it arranges any return to the United States 
of any child who has emigrated in connection with a Convention 
adoption, and the Department anticipates that it will consult with the 
relevant agency or person, as appropriate, in any instance in which it 
learns of contemplated arrangements for return that do not already 
involve the agency or person.
    Under the Convention, returning a child to the country of origin is 
a last resort. The child may still be a U.S. citizen and could be 
eligible for the Department to pay for his or her transportation 
expenses through the Department's loan repatriation program (for more 
information go to http://travel.state.gov/law/overseascitizens.html). 
Otherwise, the cost of returning the child to the United States may 
depend on what person or entity has legal custody or guardianship of 
the child.
    8. Comment: Several commenters recommend that the home studies for 
prospective adoptive parent(s) of children emigrating from the United 
States include the same information that is required in Sec.  96.47(a) 
of the regulations for home studies involving immigrating children.
    Response: The Department is not making any change in response to 
these comments. The contents of a home study in an outgoing case under 
the Convention will be determined by the law of the receiving country 
and the law of the U.S. State where the adoption is proceeding.
    9. Comment: Two commenters recommend that Sec.  96.54(b) include 
language that specifies not merely that a timely placement was sought, 
but that a qualified adoptive placement was sought.
    Response: The Department recognizes that locating a qualified 
placement is as important as finding a placement quickly. We have 
changed Sec.  96.54(b) to state that efforts must be made to find a 
timely and qualified adoptive placement.
    10. Comment: One commenter requests that a ``relative'' be defined. 
It believes that if ``relative'' is not spelled out clearly, the 
exception in Sec.  96.54(a) from efforts to find a timely adoptive 
placement in the United States for adoptions by relatives will be 
subject to abuse.
    Response: The State court that has jurisdiction over an 
intercountry adoption will look to its own State law to determine 
whether it is satisfied that reasonable efforts have been made to find 
a U.S. placement. Accordingly, we do not believe it is necessary to 
provide a definition of ``relative'' in these regulations in order to 
deter abuse of this exception.
    11. Comment: Several commenters recommend the elimination of the 
exception to reasonable efforts provided in Sec.  96.54(a), which 
allows birth parents to identify specific adoptive parents. Other 
commenters would like the birth parents to have more input on who 
adopts their child.
    Response: We have not made changes in response to these comments, 
other than to clarify, in Sec.  96.54(b), that the standard does not, 
in fact, provide an exception to the ``reasonable efforts'' rule; 
rather it provides exceptions to the prospective adoptive parent 
recruiting procedures set forth in Sec.  96.54(a)(1)-(4), thereby 
recognizing that in some cases,

[[Page 8114]]

``reasonable efforts'' can include no efforts at all, if no such 
efforts are in the child's best interests. The regulations also permit 
a State court to accept or reject an accredited agency's or approved 
person's recommendation that it is not in the best interests of a 
particular child that the procedures set forth in Sec.  96.54(a)(1)-(4) 
be followed. This approach is fully consistent with the Convention, 
which requires merely that ``due consideration'' be given to placing 
the child in the United States, as well as with the IAA.
    On the question of birthparent preferences, the rule aims for 
consistency with current practices under State law, by allowing birth 
parents to select among prospective adoptive parent(s), so long as 
State law permits them to do so. Some birth parents may prefer that 
their child be placed with a relative in another country who has the 
capacity to provide suitable care for the child. Other birth parents 
may prefer a non-relative placement abroad. Nothing in the Convention 
or the IAA warrants taking a course different from applicable State law 
on the question of birthparent preferences.
    12. Comment: One commenter seems to believe that the accreditation/
approval standards may give the misleading impression that it will be 
an accredited agency or approved person who will decide the fate of 
outbound children when, in actuality, it will be done by State courts.
    Response: It is correct that the State courts, not agencies or 
persons, will decide whether an outgoing adoption complies with 
applicable provisions of the Convention, the IAA, and State law, and 
thus may proceed. These standards apply to agencies and persons, 
however, and as such address Convention tasks that may be required of 
an agency or person. Such tasks may include gathering information and 
submitting it to the court in outgoing cases, in which case the agency 
or person must submit information to the State court that satisfies the 
Convention and IAA requirements.

Section 96.55--Performance of Hague Convention Communication and 
Coordination Functions in Outgoing Cases

    Comment: A commenter requests clarification that nothing precludes 
access to adoption process information by a State licensing authority 
to the extent otherwise authorized by State law.
    Response: The commenter is correct. Nothing in the Convention, the 
IAA, or this part is meant to preclude a State licensing authority from 
obtaining information to the extent permitted or required under the 
State law of the licensing authority.

Subpart G--Decisions on Applications for Accreditation or Approval

    Subpart G is organized in the same way as in the proposed rule, and 
includes Sec.  96.57 (Scope); Sec.  96.58 (Notification of 
accreditation and approval decisions); Sec.  96.59 (Review of decisions 
to deny accreditation or approval); Sec.  96.60 (Length of the 
accreditation or approval period); and Sec.  96.61 (Reserved).
    As discussed below, Section 96.60(b) has been modified to allow the 
accrediting entity more discretion.

Section 96.59--Review of Decisions To Deny Accreditation or Approval

    Comment: Two commenters believe that the Department should revise 
Sec.  96.59 to provide a right of administrative review of denied 
applications for accreditation or approval. One commenter states that 
such review is particularly necessary for the initial implementation 
period.
    Response: The Department is not revising Sec.  96.59 in response to 
these comments, because denial of accreditation or approval is not 
included as an adverse action under section 202(b)(3) of the IAA and is 
therefore not subject to a right of judicial review or administrative 
review. The Department notes, however, that Sec.  96.59(b) permits the 
agency or person to petition the accrediting entity for reconsideration 
of the denial, pursuant to the accrediting entity's internal review 
procedures. For further discussion of this issue, please refer to 
Section IV, C, paragraph 11 of the preamble for the proposed rule, 
published at 68 FR 54064, 54087.

Section 96.60--Length of Accreditation or Approval Period

    1. Comment: Two commenters request that the regulations state that 
the fees for accreditation and approval will be adjusted to reflect 
whether an agency or person is accredited or approved for three or five 
years, instead of four.
    Response: The Department agrees that the length of the 
accreditation or approval period is a factor that an accrediting entity 
may consider when setting its fees, but because the fee schedules are 
not included in these regulations the Department is not making any 
change in response to this suggestion. Please see the comments on Sec.  
96.8 for discussion of accrediting entity fees.
    2. Comment: Two commenters support the ability of accrediting 
entities to vary the length of accreditation periods, and request that 
the Department allow agencies and persons to volunteer to become 
initially accredited or approved for other than four years. 
Alternatively, the commenters request that the Department require 
accrediting entities to choose which agencies or persons will be 
accredited or approved for other than four years by a random process.
    Response: The criteria for choosing which agencies and persons will 
be accredited or approved for a period of other than four years will be 
established by the accrediting entities and approved by the Department. 
The Department believes that the accrediting entities will have the 
expertise to decide the appropriate criteria to make such 
determinations, and that the Department should not attempt to 
predetermine how such decisions are made. For example, it is unclear 
whether the wishes of the agency or person should be given weight, 
whether the process should be random, or whether the period should 
reflect the degree to which the agency or person demonstrates 
``substantial compliance.'' Thus, we have not changed the regulation to 
include such criteria. In addition, the Department has modified Sec.  
96.60(b) to remove the requirement that accrediting entities consult 
with the Department before deciding the exact period for which a 
particular agency or person will be accredited or approved in the first 
accreditation or approval cycle. We believe that this approach will 
improve the efficiency of the accreditation process.

Subpart H--Renewal of Accreditation or Approval

    Subpart H is organized in the same way as in the proposed rule, and 
includes Sec.  96.62 (Scope); Sec.  96.63 (Renewal of accreditation or 
approval); and Sec.  96.64 (Reserved).
    Section 96.63 has been revised in response to comments, discussed 
below, and Sec.  96.63(a) has been revised to clarify that, while the 
accrediting entity will tell accredited agencies and approved persons 
it monitors of the date by which they should seek renewal, it is the 
accredited agency's or approved person's responsibility to seek renewal 
in a timely fashion.

Section 96.63--Renewal of Accreditation or Approval

    1. Comment: A commenter requests that the Department add 
``probation'' to Sec.  96.63 as another status for an applicant. The 
commenter suggests that

[[Page 8115]]

this status could last for up to nine months after the expiration of an 
accreditation or approval period and provide accredited agencies or 
approved persons a period within which to correct any deficiencies in 
their compliance with the standards of subpart F.
    Response: We have not added the status of ``probation'' to the rule 
because it is not a concept used in the IAA. We believe, however, that 
the rule already addresses the commenter's concern, to the extent that 
Sec.  96.63(c) provides that an accrediting entity may defer its 
renewal decision in order to give an accredited agency or approved 
person notice of any deficiencies and an opportunity to correct them 
before the accrediting entity decides whether to renew the 
accreditation or approval.
    2. Comment: A commenter asserts that the focus of accrediting 
entities in renewal applications should be on an agency's or person's 
performance, rather than on merely reviewing documents.
    Response: The Department has revised Sec.  96.63(d) to incorporate 
specifically into renewal procedures the provisions of Sec.  96.24, 
relating to procedures for evaluating applicants for accreditation or 
approval. Section 96.24 provides that accrediting entities may conduct 
interviews, as well as document reviews, during site visits. Thus, an 
accrediting entity's renewal evaluation of an accredited agency or 
approved person, like its initial evaluation, may include both document 
review and interviews. See also the discussion of this issue in 
response to comments on Sec.  96.27. The Department also notes that 
Sec.  96.27(b) requires an accrediting entity to consider an accredited 
agency's or approved person's actual performance, for the purposes of 
renewal, in deciding whether the agency or person is in substantial 
compliance with the standards in subpart F.

Subpart I--Routine Oversight by Accrediting Entities

    Subpart I is organized in the same way as in the proposed rule, and 
includes Sec.  96.65 (Scope); Sec.  96.66 (Oversight of accredited 
agencies and approved persons by the accrediting entity); and Sec.  
96.67 (Reserved).
    Section 96.66 has been revised in response to comment, as discussed 
below.

Section 96.66--Oversight of Accredited Agencies and Approved Persons by 
the Accrediting Entity

    1. Comment: A commenter recommends that the Department clarify the 
duties of accrediting entities to monitor accredited agencies or 
approved persons annually. Specifically, the commenter states that the 
Department should specify that accrediting entities will monitor 
substantial compliance based on a weighting and rating system.
    Response: The Department believes that this is addressed in the 
rule, as Sec.  96.66(a) provides that an accrediting entity must 
monitor accredited agencies and approved persons at least annually to 
ensure that they are in substantial compliance with the standards in 
subpart F, as determined using a method approved by the Department in 
accordance with Sec.  96.27(d).
    To further strengthen the accrediting entity's oversight, however, 
the Department has added Sec.  96.66(c), under which an accrediting 
entity must require accredited agencies and approved persons to attest 
annually that they have remained in substantial compliance and to 
provide supporting documentation to indicate ongoing compliance with 
the standards in subpart F. Any other additional specifications related 
to the annual monitoring duties of accrediting entities will be 
detailed in the agreement between the accrediting entity and the 
Department.
    2. Comment: A commenter requests that the Department add to subpart 
I a system for oversight of accredited agencies and approved persons 
through a complaint system. The commenter also notes the importance of 
oversight through the investigation of complaints.
    Response: Oversight through review of complaints is primarily 
addressed in subpart J of this rule. Section 96.66(a) provides that the 
accrediting entities must investigate complaints about accredited 
agencies and approved persons, as provided for in subpart J. Also, the 
accrediting entities are authorized by Sec.  96.66(b) to conduct 
unannounced site visits at an accredited agency's or approved person's 
premises for the purposes of investigating a complaint against an 
accredited agency or approved person. Therefore, we did not make any 
additional modifications to subpart I.
    3. Comment: A commenter states that the oversight provisions of the 
regulations should focus on checking the performance of agencies and 
persons through interviews with clients and personnel, rather than 
simply reviewing documents.
    Response: This comment is very similar to the comment on Sec.  
96.63 with respect to procedures for renewals of accreditation and 
approval, and to comments on Sec.  96.27. Section 96.27(b) applies to 
accrediting entity oversight and requires an accrediting entity to 
consider an accredited agency's or approved person's actual 
performance, for the purposes of monitoring and enforcement, in 
deciding whether the accredited agency or approved person is in 
substantial compliance with these regulations. Therefore the Department 
does not believe it is necessary to revise the rule to respond to this 
concern.
    4. Comment: One commenter suggests that each agency or person be 
required to provide a representative with whom the accrediting entity 
can have ongoing communications about compliance with accreditation 
standards.
    Response: The Department agrees that it will be important for 
accrediting entities to have clear channels of communication with 
accredited agencies and approved persons, but does not believe this 
must be addressed in the rule. The Department intends to allow 
accrediting entities and accredited agencies and approved persons to 
set up day-to-day communication procedures that work for them.
    5. Comment: A commenter states that accrediting entities should not 
conduct investigations. It believes that allowing them to perform 
investigations will result in a situation similar to the problems 
currently facing State licensing authorities, which it believes do not 
have sufficient legal authority or personnel to do appropriate 
investigations.
    Response: The Department is taking no action in response to this 
comment. Section 202(b)(2) of the IAA clearly gives accrediting 
entities the responsibility for ongoing monitoring of accredited 
agencies and approved persons, including review of complaints, and the 
Department believes enough ``checks'' and funding are built into the 
accreditation system to ensure that accrediting entities will conduct 
properly any necessary and appropriate investigations of accredited 
agencies and approved persons. If the Department finds that an 
accrediting entity is failing to monitor adequately accredited agencies 
or approved persons, the Department may suspend or cancel the 
accrediting entity's designation under Sec.  96.10. Further, the 
Department, under Sec.  204(b)(1) of the IAA, must take adverse action 
when an accrediting entity fails or refuses to act after consultation 
with the Department and the accredited agency or approved person is not 
in substantial compliance with the standards in subpart F. In this 
auxiliary role, the Department may undertake any necessary additional 
investigation to determine if adverse action is warranted. Finally, the

[[Page 8116]]

Department notes that issues involving violations of law will properly 
be referred by the accrediting entity to appropriate law enforcement 
entities.

Subpart J--Oversight Through Review of Complaints

    Subpart J is organized in the generally same way as in the proposed 
rule, although the titles and content of some of the provisions of the 
final rule have been revised to more accurately convey the allocation 
of responsibilities and procedures for complaint review. Subpart J 
includes Sec.  96.68 (Scope); Sec.  96.69 (Filing of complaints against 
accredited agencies and approved persons); Sec.  96.70 (Operation of 
the Complaint Registry); Sec.  96.71 (Review by the accrediting entity 
of complaints against accredited agencies and approved persons); Sec.  
96.72 (Referral of complaints to the Secretary and other authorities); 
and Sec.  96.73 (Reserved).
    Section 96.68 has been revised to explain the types of complaints 
that accrediting entities will process against accredited agencies and 
approved persons. Section 96.69 has been revised to simplify the 
description of the process for filing complaints against accredited 
agencies and approved persons, and to clarify what types of individuals 
may file complaints through the Complaint Registry or otherwise. 
Section 96.70, on the operation of the Complaint Registry, has been 
revised to better convey the functions that this system will be able to 
perform with respect to complaints. These and other changes are 
discussed below, and at section III, subsection C of the preamble, 
above.

Section 96.68--Scope

    1. Comment: One commenter believes that the Department treats 
complaint review as a matter of private dispute resolution, when it 
should focus, instead, on the fundamental public interests involved. 
The commenter suggests that the Department add a new section to subpart 
J clarifying that the Department has a non-delegable responsibility to 
investigate issues of fundamental public interest related to 
intercountry adoptions.
    Response: The IAA creates a regulatory scheme where accrediting 
entities have primary responsibility for monitoring the actions of 
accredited agencies and approved persons, while the Department is 
responsible for overseeing the accrediting entities. Although a 
Complaint Registry is not required by the IAA, the Department has 
provided for the Complaint Registry in a manner consistent with this 
overall framework. Thus, these regulations provide for a complaint 
process that will ensure that most unresolved problems with accredited 
agencies or approved persons get reported to, and investigated by, the 
accrediting entities. If the accrediting entity fails to act, the 
Department will investigate, as appropriate, and determine if adverse 
action is warranted. The Complaint Registry will assist the Department 
in monitoring whether the accrediting entity is taking action as 
appropriate. The Department has added a provision at Sec.  96.70(e) 
that makes clear that the Department retains authority to take any 
action the Department deems appropriate with respect to complaints.

Section 96.69--Filing of Complaints Against Accredited Agencies and 
Approved Persons

    1. Comment: Two commenters suggest that complaints governed by this 
subpart should relate only to Convention adoptions and not to other 
adoption services provided by an agency or person.
    Response: The Department agrees that the scope of this subpart 
should be so limited, and has modified Sec.  96.68, the scope of 
subpart J, to clarify that the procedures described therein only apply 
to complaints that raise an issue of compliance with the Convention, 
the IAA, or the regulations implementing the IAA.
    2. Comment: Two commenters recommend that the Department narrow the 
types of complaints that can be filed with the Complaint Registry or 
with accrediting entities. In particular, one of the commenters asks 
that the regulations not permit a complaint to be filed with the 
Complaint Registry merely because it cannot be resolved with the 
agency, because this would transform an accrediting entity into an 
appeal board. The commenter recommends that a complainant be required 
to seek out alternative resolutions, including arbitration and appeals, 
before filing a complaint with the Complaint Registry.
    Response: The complaint system established by these regulations 
will allow individuals to file complaints with the Complaint Registry 
if they are dissatisfied with the resolution of their complaints by the 
agency or person. This does not, however, preclude the agency or person 
from offering appeals or other dispute resolution procedures, and 
clients will be free to pursue such procedures before filing a 
complaint with the Complaint Registry if they wish. In addition, while 
resort to the Complaint Registry will require the accrediting entity to 
investigate the complaint, this may allow accrediting entities to 
become aware of problems at an earlier stage than they would otherwise, 
in turn lessening the need for accrediting entities to take adverse 
actions, improving performance by accredited agencies and approved 
persons, and promoting greater compliance with the Convention, the IAA, 
and these regulations. Thus, we are not making the suggested changes.
    3. Comment: Several commenters think that individuals who wish to 
file a complaint against an accredited agency or approved person should 
be able to make their complaint directly to the Complaint Registry 
without first having to attempt resolution with the agency or person 
itself. Commenters fear that an accredited agency or approved person 
might try to dissuade individuals from filing a complaint or take 
retaliatory actions against them if they complain. One commenter 
expresses concerns regarding how the prohibition on retaliatory action 
toward a prospective adoptive family will be monitored and over whether 
prospective adoptive parent(s) that file complaints will still be 
treated unfairly by an agency or person.
    Response: The complaint procedures outlined in these regulations 
include several levels of review that should ensure that individuals 
who file complaints are treated fairly. If an agency or person takes 
any action to discourage a client or prospective client from making a 
complaint or retaliates against a client for making a complaint, the 
agency or person will not be in substantial compliance with Sec.  
96.41(e). The accrediting entities will monitor the compliance of 
accredited agencies and approved persons with this standard. The 
accrediting entities, therefore, will be a check against retaliatory 
action toward a complainant. The Department will act as another check 
against unfair treatment of complainants by an agency or person. At 
each level of review, an agency or person risks losing its 
accreditation or approval if it takes steps to retaliate against 
complainants. There are enough safeguards built into the complaint 
system that it is not necessary to change the requirement that 
complaints must first be filed with the agency or person.
    4. Comment: Several commenters believe that Sec.  96.41 of the 
proposed rule would limit use of the Complaint Registry to birth 
parents, adoptive parents, and adoptees, and recommend that the 
complaint process be expanded to allow other interested parties, such 
as health practitioners, social workers, mental health providers, and 
non-governmental organizations (NGOs), to

[[Page 8117]]

file a complaint directly with the Complaint Registry or the 
Department.
    Response: Section 96.41 governs complaints to an agency or person, 
not complaints to the Complaint Registry. If any individual is not 
satisfied with the resolution of his or her complaint by an accredited 
agency's or approved person's internal complaint procedure, then he or 
she may file a complaint with the Complaint Registry. The Department 
has added a new Sec.  96.69(c), however, to allow an individual who is 
not party to a specific Convention adoption case, but who nonetheless 
has information about an agency or person, to complain directly to the 
Complaint Registry.
    5. Comment: One commenter is concerned that the complaint 
procedures of subpart J do not establish a workable system for the 
filing, investigation, and resolution of complaints against agencies 
and persons. The commenter suggests that the Department specify the 
process for the timely investigation and resolution of complaints and 
further requests that agencies and persons have the opportunity to 
present evidence and receive proper notice of pending complaints 
against them.
    Response: Subpart J outlines the general process for making, 
investigating, and resolving complaints about accredited agencies and 
approved persons. Each accrediting entity will be responsible for 
establishing written procedures for recording, investigating, and 
acting upon complaints, that are consistent with this subpart. The 
accrediting entity's procedures must be approved by the Department. 
Accrediting entities will make information about their Department-
approved complaint procedures available upon request, and the 
Department will post information about using the Complaint Registry on 
the Department's Web site.
    6. Comment: A commenter suggests that the Department establish a 
neutral fact-finding tribunal to investigate and document alleged 
adoption abuses and to implement the Convention as a mechanism to 
resolve complaints and disputes between party countries.
    Response: With regard to alleged adoption abuses by agencies and 
persons, the courts will serve as a ``neutral tribunal'' for 
determining whether adverse actions are appropriate. With regard to 
disputes with other countries, the Department, as Central Authority, 
will address them as appropriate; the mechanisms for resolving such 
issues through diplomacy are outside of the scope of these regulations. 
The Department will use information collected by the Complaint Registry 
in the course of its ongoing diplomatic relations with Convention 
countries.

Section 96.70--Review of Complaints About Accredited Agencies and 
Approved Persons by the Complaint Registry

    1. Comment: A commenter requests further clarification on the 
proposed Complaint Registry. The commenter believes that effective 
complaint mechanisms rely on clearly delineated serial escalation 
structures, where complainants, agencies/persons, or regulators may 
appeal to successively higher levels of administrative (and where 
applicable) judicial review. Other commenters support the complaint 
procedure as written.
    Response: The Department agrees that effective complaint mechanisms 
require multiple levels of review. These regulations outline a process 
by which complainants involved in specific cases must file their 
complaints against an agency or person with that agency or person. If 
the complaint cannot be resolved through the agency's or person's 
internal complaint process, the complainant may file a complaint with 
the accrediting entity through the Complaint Registry pursuant to Sec.  
96.70. The Complaint Registry will make complaints available to the 
accrediting entity and to the Department. If an accrediting entity's 
investigation reveals that an agency or person is not in substantial 
compliance with these regulations, the accrediting entity can take an 
adverse action. The Department may suspend or cancel the accreditation 
or approval if it finds that an agency or person is substantially out 
of compliance with the standards in subpart F and that the accrediting 
entity has failed or refused, after consultation with the Department, 
to take action. We believe that these complaint procedures and 
enforcement steps provide enough levels of review to allow appropriate 
``escalation'' and to enforce IAA compliance without being unduly 
cumbersome or too slow.
    2. Comment: A commenter recommends that a complainant who is 
unsatisfied with the outcome of his or her complaint after a period of 
30 days be permitted to file directly with the Complaint Registry. The 
commenter also recommends amending the provisions to allow a 
complainant to file with the Complaint Registry if a dispute has not 
been resolved within 60 days, or some other established time limit 
sufficient to weed out frivolous complaints and to address complaints 
that can be resolved amicably. Another commenter also stresses the 
importance of timeliness in the complaint process. One commenter is 
concerned that the proposed grievance procedure will be ``ineffectual, 
inadequate and self-interested,'' because the agencies and persons have 
no viable history of handling grievances in a timely and responsible 
manner.
    Response: The Department has established complaint procedures and 
standards because of expressed concerns that some agencies and persons 
have not handled complaints effectively. Pursuant to Sec.  96.41(c), 
all accredited agencies and approved persons must respond in writing to 
complaints within 30 days of receipt and must provide expedited review 
of complaints that are time-sensitive or that involve allegations of 
fraud. If the complaint cannot be resolved through the agency's or 
person's internal complaint process, then the complainant may file a 
complaint with the accrediting entity through the Complaint Registry. 
Also under Sec.  96.69(b), if the complaint was resolved by an 
agreement to take action, but the primary provider, agency, or person 
failed to take the promised action within thirty days of agreeing to do 
so, the complaint may be filed with the accrediting entity through the 
Complaint Registry. Finally, Sec.  96.71 also requires that the 
accrediting entity maintain procedures, including deadlines, for taking 
action upon complaints it receives from the Complaint Registry. This 
approach should be given a chance to work before further, more onerous, 
requirements are imposed on the assumption that agencies and persons 
will not resolve complaints efficiently and effectively.
    3. Comment: A commenter requests that the Department adopt 
safeguards to screen out spurious or malicious complaints and to 
protect against manipulation of the complaint process.
    Response: The Department believes that the constraints on filing 
complaints with accrediting entities will serve this safeguard 
function. In addition, once an accrediting entity receives a complaint 
from the Complaint Registry under Sec.  96.70(b)(1), it will have 
authority to address spurious or other meritless complaints 
appropriately, and will share information publicly only about 
complaints against agencies or persons that have been substantiated, 
pursuant to Sec.  96.92(a).
    4. Comment: A commenter supports the creation of the Complaint 
Registry. It encourages the Department to consider following Norway's 
example by making the Complaint Registry an ombudsman service.

[[Page 8118]]

    Response: The United States has followed a different model for 
implementation of the Convention, with the Department and accrediting 
entities having functions as provided in the IAA. The Complaint 
Registry is consistent with that structure.
    5. Comment: One commenter thinks that the Complaint Registry should 
be easily accessible to potential complainants by telephone, postal 
mail, or electronic mail. Another commenter suggests the Complaint 
Registry should be available online.
    Response: The Department agrees that it is important that the 
Complaint Registry be easily accessible to potential complainants as 
well as efficient, but also believes that the individuals making 
complaints must also be held initially responsible for making them in 
writing, not over the telephone. While the administrative details on 
how to access the Complaint Registry are not suitable for incorporation 
into these regulations, they will be posted on the Department's 
website, and the public will be able to access the Complaint Registry 
through multiple media.
    6. Comment: Numerous commenters ask how the Complaint Registry will 
be set up. Others ask who will have ultimate oversight over the 
Complaint Registry. Other commenters want to know if the Complaint 
Registry will be established within the Department. Some commenters 
prefer that its precise functions be detailed in an agreement with the 
Department.
    Response: The Department no longer contemplates that the Complaint 
Registry will be an independent entity with which the Department will 
have an agreement. Rather it will be a system established by the 
Department to assist the accrediting entities and the Department in 
their oversight functions. The relevant sections in subpart J, 
Sec. Sec.  96.68-71, have been revised so that a party to an adoption 
case with a complaint against an agency or person may file it with the 
Complaint Registry after first seeking to resolve it with the agency or 
person. The Complaint Registry will receive and maintain information on 
complaints, and track the outcome of complaints. Addressing the 
complaints will be the responsibility of the accrediting entities and, 
in some circumstances, the Department. Every accredited agency or 
approved person will be required to give information to clients about 
their own complaint procedures as well as contact information for the 
Complaint Registry pursuant to Sec.  96.41(a).
    Subpart J describes the general duties and functions of the 
Complaint Registry. Once the Department has set up the Complaint 
Registry, information about the functions and processes of the 
Complaint Registry, as well as contact information, will be posted on 
the Department's website.
    7. Comment: A few commenters want the Complaint Registry housed 
with the Federal Trade Commission (FTC).
    Response: The IAA gives the Department and its designated 
accrediting entities the responsibility for all accreditation and 
approval functions. The Complaint Registry is not provided for by the 
IAA, but is being provided for by the Department in its discretion to 
assist the accrediting entities and the Department in performing their 
oversight functions under the IAA. While section 102(c) of the IAA 
explicitly states that the Department's functions may not be delegated 
to any other Federal agency, the Department notes that nothing would 
preclude the FTC from undertaking an investigation of an adoption 
service provider if the FTC had jurisdiction to do so under its own 
authorizing legislation (e.g., for false advertising).
    8. Comment: One commenter asks that the Department provide some 
method to ensure that agencies and persons keep records of complaints 
against them and provide factual information about those complaints to 
any individual who requests it.
    Response: Pursuant to Sec.  96.41, accredited agencies and approved 
persons are required to keep records of complaints against them, and to 
provide reports to the accrediting entity and the Department on the 
complaints they received and how they were resolved. In addition, Sec.  
96.92 requires accrediting entities to maintain written records 
documenting complaints against accredited agencies and approved 
persons, and steps taken to resolve complaints. If a member of the 
public inquires about complaints against a particular agency or person, 
the accrediting entity must provide information on substantiated 
complaints.
    9. Comment: A commenter that is a State licensing authority 
suggests that referrals be made by the accrediting entity to the 
applicable State licensing authorities when complaints involve agencies 
or persons who are also subject to State monitoring. This would 
facilitate a close working relationship and coordination between the 
accrediting entities and State licensing authorities.
    Response: The Department agrees that communication between 
accrediting entities and State licensing authorities is important. The 
Department has revised Sec.  96.72(b) to require the accrediting 
entity, after consultation with the Department, to refer to a State 
licensing authority or appropriate law enforcement authorities 
substantiated complaints that involve conduct in violation of Federal, 
State, or local law. The Department has also revised Sec.  96.77(d) to 
require reporting to the appropriate State licensing authority of any 
adverse action that changes the accreditation or approval status of an 
agency or person. See also comment 1 on Sec.  96.77.
    10. Comment: One commenter states that the funding for the 
Complaint Registry should come from fees levied by the Department. 
Others want the Department to fund the Complaint Registry. Others want 
the provision permitting accrediting entities to collect and remit fees 
for the Complaint Registry deleted. Other commenters state that the 
fees for the Complaint Registry should not be levied collectively and 
that the cost of complaints should be borne exclusively by the agency 
or person in question. Commenters would prefer that information on fees 
be clear.
    Response: The Department agrees that the Complaint Registry must be 
adequately funded. We therefore have retained the provisions that give 
us the discretion on how to fund the Complaint Registry. The Complaint 
Registry will assist both the Department and the accrediting entities, 
each of which has authority under the IAA to charge fees for its 
functions. How the Complaint Registry will actually be funded will 
depend on the overall costs of operating it, the availability of 
appropriated funds, and the proper allocation of costs between the 
Department and the accrediting entities.
    11. Comment: One commenter recommends that every complaint be 
forwarded to a designated accrediting entity for review.
    Response: The Complaint Registry will make complaints available to 
the accrediting entity and the Department. The Department anticipates 
that all properly filed complaints against accredited agencies and 
approved persons that raise an issue of compliance with the Convention, 
the IAA, or the regulations implementing the IAA will be forwarded to 
the appropriate accrediting entity, with the possible exceptions of 
sensitive law enforcement matters and complaints raised by government 
officials or a foreign Central Authority directly with the Department 
pursuant to Sec.  96.69(d). Even if an accrediting entity is not given 
a particular complaint to review directly, it will be informed of all 
such complaints that are filed against an

[[Page 8119]]

agency or person that it has accredited or approved. In addition, 
pursuant to Sec.  96.41, accredited agencies and approved persons are 
required to provide the accrediting entity and the Department with 
reports on the complaints they received and how they were resolved.
    12. Comment: A commenter recommends that the Department add 
criteria to the regulations specifying the process for submitting 
complaints against the Complaint Registry. It suggests that such 
complaints be handled in the same way complaints about accrediting 
entities will be handled.
    Response: The public may alert the Department, Bureau of Consular 
Affairs, of any dissatisfaction it has with the operation of the 
Complaint Registry. Because the Department no longer contemplates that 
the Complaint Registry will be an independent entity, but rather that 
it will be a system established by the Department to assist the 
Department and the accrediting entities, the Department does not 
anticipate that any procedures for filing complaints against the 
Complaint Registry will be necessary.

Section 96.71--Review of Complaints Against Accredited Agencies and 
Approved Persons by the Accrediting Entity

    Comment: One commenter asks if the notifications of the outcome of 
complaint investigations made pursuant to Sec.  96.71(c) (which in the 
proposed rule would have required notifications to the complainant, the 
Complaint Registry, and to any other entity that referred information), 
will be available to the public through a FOIA request. Commenter 
believes that such information will help the public protect itself and 
make informed decisions.
    Response: The Department has ensured, in subpart M of these 
regulations, that the public may obtain information about the outcome 
of an accrediting entity's investigations into a complaint. Section 
96.92(a) requires an accrediting entity to verify, upon inquiry from a 
member of the public, whether there have been any substantiated 
complaints against an accredited agency or approved person and, if so, 
to provide information about the status and nature of the substantiated 
complaint. Thus, members of the public may learn the outcome of an 
investigation that resulted in a substantiated complaint against an 
accredited agency or approved person. Section 96.91(b) also requires an 
accrediting entity to explain to the public the reasons for any 
withdrawal of temporary accreditation, or suspension, cancellation, or 
refusal to renew accreditation or approval, or any debarment.
    Section 96.71(d) of the final rule requires that the accrediting 
entity enter information on the outcome of complaint investigations 
into the Complaint Registry established by the Department. The FOIA and 
its exceptions, along with other applicable Federal law such as the 
Privacy Act, will apply to this information to the extent that it 
constitutes a Department record.

Section 96.72--Referral of Complaints to the Secretary and Other 
Authorities

    1. Comment: One commenter thinks that the regulations limit reports 
to the Department by an accrediting entity to complaints that 
demonstrate a pattern of serious, willful, grossly negligent, or 
repeated failures to comply with the standards of subpart F. The 
commenter requests that an accrediting entity report every complaint to 
the Department and make the investigation public.
    Response: The regulations do not limit the reporting requirements 
of an accrediting entity to the serious infractions listed in Sec.  
96.72. Pursuant to Sec.  96.93(a)(4), accrediting entities must make 
semi-annual reports to the Department that summarize, among other 
things, all substantiated complaints against accredited agencies and 
approved persons and the impact of such complaints on their 
accreditation or approval status. As well, under Sec.  96.71, the 
accrediting entity is required to enter information into the Complaint 
Registry about the outcomes of investigations and actions taken on 
complaints. This information then will be available to the Department.
    As well, Sec.  96.92 does require an accrediting entity to respond 
to public inquiries regarding substantiated complaints against 
accredited agencies or approved persons, disclosing the status and 
nature of the complaint. The public, therefore, has access to 
information about complaints against agencies and persons.
    2. Comment: One commenter suggests that the regulations should 
require accrediting entities to have an investigator familiar with 
relevant laws, as well as Section 501(c) of the Tax Code, on retainer 
to investigate complaints.
    Response: Pursuant to Sec.  96.24(a), accrediting entities must use 
evaluators that have expertise in intercountry adoption, standards 
evaluation, or management or oversight of a child welfare organization. 
Evaluators with this type of expertise are presumed to have familiarity 
with relevant laws. The Department does not think it necessary to 
specify in these regulations exactly what evaluators must know about 
relevant laws. The Department wants to leave flexibility in the 
regulations to allow accrediting entities to find and use the people 
they believe will be most qualified for the job of evaluating agencies 
and persons.

Subpart K--Adverse Action by the Accrediting Entity

    Subpart K is organized in the same way as in the proposed rule, and 
includes Sec.  96.74 (Scope); Sec.  96.75 (Adverse action against 
accredited agencies or approved persons not in substantial compliance); 
Sec.  96.76 (Procedures governing adverse action by the accrediting 
entity); Sec.  96.77 (Responsibilities of the accredited agency, 
approved person, and accrediting entity following adverse action by the 
accrediting entity); Sec.  96.78 (Accrediting entity procedures to 
terminate adverse action); Sec.  96.79 (Administrative or judicial 
review of adverse action by the accrediting entity); and Sec.  96.80 
(Reserved).
    The Department made a number of revisions to Sec. Sec.  96.76--
96.79 of this subpart, which are discussed below and at section II, 
subsection C of the preamble, above. Many of these revisions clarify 
the options that are available to an agency or person that is faced 
with an adverse action. A number of others relate to the transfer of 
Convention cases and adoption records.

Section 96.75--Adverse Action Against Accredited Agencies or Approved 
Persons Not in Substantial Compliance

    1. Comment: A commenter requests that the Department specify 
whether imposing the adverse action of suspension means that an agency 
or person loses accreditation or approval and must transfer cases. If 
the purpose of suspension is to allow an entity a short period of time 
in which to take corrective action to comply with standards, the 
commenter recommends the category be renamed ``probation, with required 
corrective action'' and not include a requirement to transfer cases and 
records. Another commenter echoes the suggestion of a probationary 
period, recommending a one-time, three-month probationary period. The 
commenter also states that classifying corrective action as an adverse 
action, as Sec.  96.75(b) does, is inconsistent with the typical use of 
the term ``corrective action;'' this commenter believes that requiring 
corrective action is typically a precursor to a decision to impose a 
penalty. These commenters also state that there is

[[Page 8120]]

insufficient due process for agencies or persons that are subject to 
adverse actions. Other commenters support the regulations as stated.
    Response: The Department is not renaming, removing, or creating any 
category of adverse action in response to these comments, because 
section 202(b)(3) of the IAA specifies the types of adverse action an 
accrediting entity may take as including requiring corrective action; 
imposing sanctions; and refusing to renew, suspending or canceling 
accreditation or approval. The IAA does not specify ``probation'' as an 
adverse action. If an accrediting entity requires corrective action or 
imposes sanctions--two of the adverse actions specified by the IAA--and 
yet remains concerned about the agency's or person's compliance with 
the standards in subpart F, it may take one of the other types of 
adverse action provided for in the IAA--affecting the accreditation or 
approval status of the agency or person--and may require the agency or 
person to transfer any Convention cases or adoption records.
    In response to the question on the effects of suspension, we note 
that, per Sec.  96.77(b), ``suspension'' of accreditation or approval 
will require an agency or person to cease to provide adoption services 
in Convention adoption cases and consult with the accrediting entity to 
determine whether to transfer its Convention cases and adoption 
records. In the case of cancellation of accreditation or approval, 
however, Convention cases and adoption records must be transferred to 
other accredited agencies, approved persons, or State archives, 
according to the plans required by Sec. Sec.  96.33(e) and 96.42(d).
    In response to commenters' concerns about the due process available 
to agencies or persons facing adverse actions, the Department notes 
that Sec.  96.76(b) of the rule provides that, prior to taking adverse 
action, the accrediting entity may advise the agency or person of the 
deficiencies that may warrant an adverse action, provide an opportunity 
to take corrective action, and recognize demonstrated compliance as 
curing the deficiency. If the accrediting entity does not communicate 
with the agency or person prior to taking the adverse action, Sec.  
96.76(b) requires the accrediting entity subsequently to allow the 
agency or person to demonstrate that the adverse action was 
unwarranted. We note, too, that agencies and persons may seek judicial 
review in Federal court of adverse actions in accordance with the IAA. 
Section 96.79 incorporates the IAA's provisions on judicial review. 
Please see the discussion on Sec. Sec.  96.76 through 96.79 for a 
summary of comments on these sections, and the Department's detailed 
responses related to options to protest adverse actions.
    2. Comment: A commenter objects to accrediting entities imposing 
sanctions regarding specific cases or specific Convention countries as 
described in Sec.  96.75(e). Other commenters submitted conflicting 
comments about whether accrediting entities should be allowed to 
determine whether an agency or person has substantially complied with 
standards for accreditation or approval. Other commenters state that 
the Department should develop the procedures used by accrediting 
entities to impose adverse actions. Several commenters state that Sec.  
96.76 does not properly reflect section 204 of the IAA, regarding the 
imposition of adverse actions, and suggest that the language of the IAA 
be incorporated into the regulations to establish the standards for the 
imposition of adverse actions.
    Response: To enforce the accreditation and approval standards laid 
out in subpart F of these regulations, the IAA gives both accrediting 
entities and the Department the authority to impose adverse actions. 
Section 202(b) of the IAA gives an accrediting entity authority to take 
adverse action when an agency or person is not in substantial 
compliance with the applicable requirements, and gives accrediting 
entities substantial flexibility in determining which adverse action is 
appropriate. The Department believes Sec.  96.75 accurately reflects 
this flexibility in the IAA.
    We are not removing the regulatory provisions that permit 
accrediting entities to impose sanctions related to a particular case 
or for a specific Convention country. Accrediting entities will be in 
the best position to learn of problems in specific cases or Convention 
countries and to determine if corrective actions are needed and what 
adverse action is appropriate. The methods developed by the accrediting 
entities to assess substantial compliance, pursuant to Sec.  96.27, may 
also aid the accrediting entities in determining which adverse actions 
are appropriate for particular situations.
    Finally, we believe this provision is consistent with section 
204(b) of the IAA, which only requires the Department to suspend or 
cancel accreditation or approval in instances in which it finds that an 
agency or person is substantially out of compliance with the standards 
in subpart F and that the accrediting entity has failed or refused, 
after consultation with the Department, to take appropriate enforcement 
action. The Department may also debar agencies or persons in egregious 
circumstances, as specified in section 204(c). Subpart L of the rule 
contains a number of provisions incorporating IAA section 204's 
guidelines for Departmental oversight of agencies and persons.

Section 96.76--Procedures Governing Adverse Action by the Accrediting 
Entity

    Comment: Several commenters recommend that the regulations clearly 
state that accrediting entities should be allowed to take adverse 
action without notice only in the case of ``clear and convincing 
evidence of an imminent danger to a child.'' Other commenters assert 
that if an adverse action is taken without notice, the accrediting 
entity must allow the accredited agency or approved person an 
opportunity after the notice is issued to provide information refuting 
that the adverse action was warranted.
    Response: We have changed Sec.  96.76 to address the commenters' 
concerns about providing notice to agencies and persons and to ensure 
that it is consistent with the IAA. Section 96.76(b) now provides that, 
before taking an adverse action, the accrediting entity may advise the 
agency or person of the deficiencies that may warrant adverse action; 
provide an opportunity for the agency or person to take corrective 
action; and recognize demonstrated compliance. This section also 
provides that, if the accrediting entity takes the adverse action 
without first providing notice, the accrediting entity must 
subsequently provide notice and an opportunity for the agency or person 
to refute that the adverse action was warranted. Thus the affected 
agency or person is always given an opportunity to be heard, either 
before or after adverse action is taken, and the accrediting entity is 
given the flexibility to act immediately if the circumstances so 
warrant. The Department thinks it important to leave the accrediting 
entities the discretion to balance the interests and risks at stake for 
each factual scenario, in determining at what point to allow the 
affected agency or person an opportunity to be heard. We have removed 
from the rule the example given in the parenthetical, to avoid any 
suggestion that the example is the sole circumstance in which prior 
notice would not be required.

[[Page 8121]]

Section 96.77--Responsibilities of the Accredited Agency, Approved 
Person, and Accrediting Entity Following Adverse Action by the 
Accrediting Entity

    1. Comment: One commenter recommends that an accrediting entity be 
required to notify the applicable State approval or licensing authority 
of an adverse action against an accredited agency or approved person, 
to enhance coordination between accrediting entities and State 
licensing authorities.
    Response: The Department agrees that, in order to comply with these 
regulations, accrediting entities will have to communicate well with 
State licensing authorities. Therefore, the Department is adding to 
Sec.  96.77(d) the requirement that accrediting entities report to the 
appropriate State licensing authority, in addition to the Department 
(as was required by the proposed rule), any adverse actions they take 
that changes the accreditation or approval status of an agency or 
person. This notification requirement will be addressed more fully in 
the accrediting entity's agreement with the Department.
    2. Comment: Several commenters recommend that the Department 
clarify the guidelines for the transfer of Convention cases due to 
suspension or cancellation of accreditation or approval. Many 
commenters ask whether prospective adoptive parent(s) will have a role 
in the decision to transfer their case. Another commenter thinks that 
accrediting entities should not play any role in determining whether 
and how to transfer pending cases or records, suggesting that it would 
not be appropriate for the accrediting entity to be involved in 
handling of individual cases or, given the financial benefit associated 
with the transfer, in selecting the agency or person to receive 
transferred cases.
    Response: The Department is not eliminating the requirement that 
after cancellation and, in some instances after suspension, an agency 
or person must transfer its Convention cases under the oversight of the 
accrediting entity. Under Sec. Sec.  96.33(e) and 96.42(d), the agency 
or person must have plans for transferring Convention cases and 
adoption records if it ceases to be able to provide adoption services. 
In the case of cancellation, the final rule requires agencies and 
persons to execute these plans. In the case of suspension, the agency 
or person must consult with the accrediting entity about whether to do 
so. Agencies and persons will have the main responsibility for working 
with families when transferring their Convention cases after suspension 
or cancellation but they will have to keep the accrediting entity 
informed about the process.
    In the event that the agency or person is unable to transfer its 
Convention cases and/or adoption records consistent with these plans, 
the Department has amended Sec. Sec.  96.77(b) and (c) to require the 
accrediting entity to inform the Department of the breakdown in the 
transfer plans, and to then assist the Department in coordinating 
efforts to help the agency or person with the transfer of pending 
Convention cases and adoption records. Such coordination will include 
efforts to identify other accredited agencies or approved persons to 
assume responsibility for the cases. This requirement ensures that the 
accrediting entity contributes its institutional knowledge about the 
agency or person, including knowledge related to the agency or person's 
transfer plan, to the process of transferring cases and records. This 
requirement also compels the accrediting entity to remain involved in 
overseeing case transfers that result from its adverse actions. It 
should not, however, put the accrediting entity in the position of 
independently assuming individual case transfer responsibilities and/or 
independently selecting alternate accredited agencies and/or approved 
persons to which cases will be transferred.

Section 96.78--Accrediting Entity Procedures To Terminate Adverse 
Action

    Comment: Several commenters suggest that an agency, person, or 
other interested party should have the opportunity to challenge the 
accrediting entity's interpretation of a regulation or law. Further, 
some commenters express concern that the provision in Sec.  96.67 that 
requires an agency or person to petition an accrediting entity to 
terminate an adverse action on the grounds that the deficiencies cited 
have been corrected before seeking judicial review in effect requires 
an agency or person to admit guilt. The commenters recommend that the 
Department establish an administrative mechanism through which an 
agency or person can challenge an adverse action it believes was 
unfounded or taken improperly.
    Response: The Department notes that this rule provides several 
opportunities for agencies or persons to challenge the accrediting 
entity's interpretation of a regulation or law. Under Sec.  96.76(b), 
as revised, an accrediting entity must allow an accredited agency or 
approved person the opportunity to submit information refuting that an 
adverse action would be or is warranted. The accrediting entity may 
withdraw, or choose not to impose, an adverse action based on this 
information. The IAA also provides for Federal judicial review of an 
accrediting entity's adverse action.
    In addition, the Department has revised Sec.  96.78 to clarify the 
responsibilities of the accrediting entity to provide an opportunity to 
seek termination of an adverse action. Section 96.78(a) now states that 
an accrediting entity must maintain internal petition procedures, 
approved by the Department, to give agencies and persons an opportunity 
to challenge adverse actions on grounds that the deficiencies 
underlying the adverse action have been corrected. The accrediting 
entity must now inform the agency or person of these procedures at the 
same time that it informs them of the adverse action itself. To ensure 
consistency with the fact that the IAA provides no other right to 
review of adverse actions at the accrediting entity level, the 
provision now also makes explicit that the accrediting entity is not 
required to maintain any other procedures to terminate or review 
adverse actions, and may make such procedures available only with the 
consent of the Department.
    In response to commenters' concerns that this section requires an 
agency or person to assume ``guilt'' before challenging an adverse 
action, the Department has added Sec.  96.78(f) to clarify that nothing 
in this section would prevent an accrediting entity from withdrawing an 
adverse action if it concludes that such an action was based on a 
mistake of fact or other error. Thus, an agency or person that believes 
it has done nothing wrong may ask an accrediting entity to withdraw an 
adverse action as unfounded or based on a factual error. Since this is 
not a formal administrative remedy, but just an option for conducting 
business that remains available, this approach could be taken at any 
time. While the agency or person will have no formal ``right'' to 
review, good business practices will presumably result in the 
accrediting entity in some cases choosing to change its prior decision. 
Alternatively, the agency or person may choose to challenge the action 
in district court. In contrast, an agency or person who wishes to 
demonstrate that it has taken corrective action to remediate an 
admitted deficiency may petition the accrediting entity to terminate 
the adverse action under the procedures required under Sec.  96.78(a).
    Please also see the responses to comments on Sec. Sec.  96.79 and 
96.84, related to review of accrediting entity decisions.

[[Page 8122]]

Section 96.79--Administrative or Judicial Review of Adverse Action by 
the Accrediting Entity

    1. Comment: Several commenters raise concerns over the limits of 
judicial and/or administrative review of adverse action. Many 
commenters request that the Department create guidelines for the 
imposition of adverse actions that would include notices, standards of 
proof, hearings, an internal review process, and an appeal process to 
ensure due process for accredited agencies or approved persons.
    Response: Under Sec.  96.78(a), accrediting entities are required 
to maintain internal procedures, approved by the Department, to allow 
agencies or persons to petition for termination of adverse actions on 
the grounds that the deficiencies necessitating the adverse action have 
been corrected. This process for petitioning to terminate an adverse 
action on these limited grounds is the only internal review procedure 
set out in the IAA. If, after exhausting its remedies through the 
internal petition process, where applicable, an agency or person wishes 
to appeal the final decision of the accrediting entity, it may do so in 
Federal court as provided under the IAA. We have modified Sec.  
96.79(a) to reflect these parameters in a way that is consistent with 
the IAA.
    The Department has also revised Sec.  96.79(b) to emphasize that 
the IAA's limitation on administrative review of adverse actions by an 
accrediting entity in section 202(c)(3) of the IAA necessarily applies 
to both nonprofit accrediting entities and public domestic authorities 
that are designated as accrediting entities.
    2. Comment: Some commenters maintain that the scope of judicial 
review after a denial of accreditation or approval as set forth in 
Sec.  96.79(b) is unreasonably narrow. One commenter suggests that, if 
an agency or person is denied accreditation or approval, the agency or 
person should be allowed to apply to another accrediting entity.
    Response: The IAA provides for judicial review, in a United States 
district court, of adverse actions, including requiring corrective 
action, imposing sanctions, or suspension of, cancellation of, or 
refusal to renew accreditation or approval. As discussed in the 
response to the comment on Sec.  96.59 in subpart G, denial of 
accreditation or approval is not included within the scope of such 
review.
    The Department has not changed the regulation to permit agencies 
and persons to apply to a different accrediting entity after being 
denied accreditation or approval. The Department does not want to 
encourage agencies and persons to ``shop around'' to different 
accrediting entities instead of bringing their services into compliance 
with these regulations. In addition, the Department wishes to avoid the 
drain on the limited resources of all accrediting entities that would 
result if a second accrediting entity would be required to go through 
the work of gathering documentation, doing site visits, and 
interviewing people in connection with an evaluation of an agency or 
person that another accrediting entity has already evaluated.
    3. Comment: One commenter thinks that Sec.  96.79(c), which 
requires an accredited agency or approved person to seek Federal 
judicial review of an adverse action through a Federal district court, 
will hinder it from taking on adoption cases with extenuating 
circumstances or special needs children.
    Response: The provisions for judicial review in the IAA and Sec.  
96.79(c) are intended as a benefit, not a burden, to agencies and 
persons, to ensure that they are treated fairly when subjected to 
adverse actions. Sections 96.76 and 96.78 also now clearly provide 
opportunity for an agency or person to seek reversal of an adverse 
action without going to Federal court, which may address the 
commenter's apparent concern with the time and cost of Federal 
litigation. This provision should not in any way discourage agencies or 
persons from performing adoption services for special needs children in 
Convention countries.
    4. Comment: One commenter requests that the Department explain the 
significance of IAA section 202(c)(3) of the IAA, which provides for 
judicial review of adverse actions in Federal courts under 5 U.S.C. 706 
of the Administrative Procedure Act (APA), and treats an accrediting 
entity as an ``agency'' under 5 U.S.C. 701 for the purpose of this 
review. The commenter suggests that its ability and willingness to act 
as an accrediting entity will be seriously impacted by this provision, 
along with that of other private organizations and public authorities.
    Response: The right provided in section 202(c)(3) of the IAA to 
challenge adverse actions in Federal courts is an express exception to 
section 504 of the IAA's mandate that the Convention and the IAA shall 
not be construed to create a private right of action, except where 
otherwise provided. Section 706 of the APA sets out the legal standards 
by which a Federal court may review decisions made by agencies, as 
defined in the APA, and the procedures which the agencies used to make 
those decisions. The relief sought in an APA action is generally 
reversal or modification of an administrative action, and money damages 
are not available. The statement that, for the purposes of challenges 
to adverse actions, an accrediting entity will be considered a 5 U.S.C. 
701 agency, brings all accrediting entities (private nonprofit or 
public) into the scope of ``agencies'' against whom APA actions may be 
brought. Thus, for example, 5 U.S.C. 706(2)(A) would allow a Federal 
court to set aside an adverse action that had been taken ``in excess'' 
of an accrediting entity's authority under the IAA.
    5. Comment: Two commenters recommend that the Department include a 
provision for alternative dispute resolution, given the potential 
financial burden of Federal court litigation. According to one of the 
commenters, this could be accomplished by allowing accrediting entities 
to utilize dispute resolution clauses in their contracts with agencies 
or persons seeking accreditation or approval.
    Response: Section 202(c)(3) of the IAA expressly authorizes Federal 
judicial review of certain enumerated adverse actions taken by an 
accrediting entity, and section 202(c)(2) expressly prohibits 
administrative review of an adverse action by an accrediting entity 
(except to the extent review is provided under section 202(c)(1) to 
determine if deficiencies have been corrected). The IAA is silent on 
whether accrediting entities and agencies and persons may agree to 
alternative dispute resolution procedures. We are not including in the 
regulations a provision that permits designated accrediting entities to 
mandate that agencies or persons agree to binding arbitration, or agree 
to use other alternative dispute resolution mechanisms; such an 
approach could lead to agencies or persons feeling coerced. By the same 
token, we are not ruling out the option that accrediting entities and 
agencies and persons may mutually agree to alternative dispute 
mechanisms with respect to a particular dispute.

Subpart L--Oversight of Accredited Agencies and Approved Persons by the 
Secretary

    Subpart L is organized in the same way as in the proposed rule, and 
includes Sec.  96.81 (Scope); Sec.  96.82 (The Secretary's response to 
actions by the accrediting entity); Sec.  96.83 (Suspension or 
cancellation of accreditation or approval by the Secretary); Sec.  
96.84 (Reinstatement of accreditation or approval after suspension or 
cancellation by the Secretary); Sec.  96.85 (Temporary and permanent 
debarment

[[Page 8123]]

by the Secretary); Sec.  96.86 (Length of debarment period and 
reapplication after temporary debarment); Sec.  96.87 (Responsibilities 
of the accredited agency, approved person, and accrediting entity 
following suspension, cancellation, or debarment by the Secretary); 
Sec.  96.88 (Review of suspension, cancellation, or debarment by the 
Secretary); and Sec.  96.89 (Reserved).
    We have modified Sec.  96.83(a) and Sec.  96.85(b) to clarify that 
the Department alone has the discretion to determine whether the 
conditions for taking action under Sec. Sec.  96.83 and Sec.  96.85 
have been satisfied. In addition, the Department has added new 
Sec. Sec.  96.85(b)(2)(ii) and (iii), incorporating directly the 
provisions of section 204(e) of the IAA, which specifies as grounds for 
debarment certain egregious failures to comply with home study 
requirements. Other changes, in particular changes to Sec. Sec.  96.84, 
96.86, and 96.87 paralleling changes made in subpart K, are described 
below.

Section 96.81--Scope

    1. Comment: Two commenters recommend that oversight of agencies and 
persons should be moved from accrediting entities and the Department to 
the FTC. A commenter is concerned that the Department lacks expertise 
and interest in overseeing agencies and persons.
    Response: The explanation given in the response to comment 7 on 
Sec.  96.70 above, also applies to this comment. The Department is 
committed to identifying and working with qualified accrediting 
entities to oversee agencies and persons.
    2. Comment: One commenter suggests that the Department create a 
centralized online database with information on the accreditation 
status of all agencies and persons.
    Response: Accrediting entities are required to maintain and make 
available to the public information on accredited agencies and approved 
persons, such as their specific accreditation/approval status. (See 
Sec. Sec.  96.91 and 96.92). The Department will make available, on its 
website, the identities of the accrediting entities.

Section 96.82--The Secretary's Response to Actions by the Accrediting 
Entity

    Comment: Several commenters believe that imposing adverse actions 
on agencies and persons without notification is problematic. They think 
that Sec.  96.82(b) allows the Department to inform the Hague Permanent 
Bureau of an adverse action when the party in question has not had an 
opportunity to contest the decision from the accrediting entity. To 
ensure that the rights of agencies and persons are protected, 
commenters request creation of a detailed appeal process with notice 
and hearing.
    Response: In order for the Hague Permanent Bureau to have an 
accurate list of accredited agencies and approved persons, consistent 
with our obligations under Article 13 of the Convention, the Hague 
Permanent Bureau must be notified of changes in status that result from 
adverse actions, even when the adverse action has been taken without 
prior notice. Therefore we are not altering Sec.  96.82(b) in response 
to this comment. We note that Sec. Sec.  96.84 and 96.86 
correspondingly require the Department to notify the Hague Permanent 
Bureau, as appropriate, when an adverse action has been terminated or 
withdrawn. For a discussion of the issue of notice in the context of 
adverse action taken by an accrediting entity, please see the response 
to the comment on Sec.  96.76.

Section 96.83--Suspension or Cancellation of Accreditation or Approval 
by the Secretary

    Comment: Commenters suggest that the third provision in Sec.  
96.83(b), stating that the Department may suspend or cancel 
accreditation or approval if such action ``will protect the interests 
of children'' should be listed first, ahead of furthering U.S. foreign 
policy or national security interests and protecting the ability of 
U.S. citizens to adopt children under the Convention.
    Response: The listing of grounds on which the Department may act is 
not intended to convey their relative importance, or any sequence in 
which the grounds will be considered. The Department, nevertheless, 
made the suggested change. A key objective of both the Convention and 
the IAA is to ensure that standards are in place that protect the best 
interests of children.

Section 96.84--Reinstatement of Accreditation or Approval After 
Suspension or Cancellation by the Secretary

    Comment: One commenter opposes the provision allowing an agency or 
person to apply for reinstatement of accreditation or approval.
    Response: Section 204(b)(2) of the IAA explicitly allows 
applications for reinstatement of accreditation or approval by agencies 
or persons in situations in which the Department is satisfied that the 
deficiencies that necessitated cancellation have been corrected. 
Section 96.84 of the rule tracks these provisions of IAA section 
204(b)(2), as well as its provisions on terminating a suspension. The 
comment nevertheless prompted the Department to add language to Sec.  
96.84(a) to specify the narrow grounds on which the agency or person 
can petition the Department for relief--namely, that deficiencies 
necessitating the suspension or cancellation have been corrected. 
Moreover, we note that Sec.  96.84(a) requires that an agency or person 
authorized to reapply for accreditation or approval generally must 
reapply to the accrediting entity that handled its prior application, 
to ensure that the agency or person will be subject to rigorous 
evaluation.
    The Department has also added Sec.  96.84(b) to make clear that 
nothing in this section prevents the Department from withdrawing a 
cancellation or suspension upon a finding that the action was based on 
a mistake of fact or otherwise in error. Please see also the discussion 
in response to comments on Sec.  96.78.

Section 96.85--Temporary and Permanent Debarment by the Secretary

    Comment: The only comments specific to Sec.  96.85 noted agreement 
with the debarment provisions and the language that defines when the 
Department is to take action for debarment.
    Response: No response is required to these comments; as noted in 
the introduction to the discussion of subpart L, Sec.  96.85 now 
incorporates the provisions of section 204(e) of the IAA on debarment 
for certain egregious failures to comply with home study requirements.

Section 96.86--Length of Debarment Period and Reapplication After 
Temporary Debarment

    Comment: The comments on Sec.  96.78 expressing concern that the 
proposed rule would force an agency or person to admit guilt before 
challenging an adverse action were also made with respect to this 
section.
    Response: The Department has added Sec.  96.86(c) to clarify that 
this section does not prevent the Department from withdrawing a 
debarment if it was based on factual or other error. Please see also 
the discussion responding to comments on Sec.  96.78.

[[Page 8124]]

Section 96.87--Responsibilities of the Accredited Agency, Approved 
Person, and Accrediting Entity Following Suspension, Cancellation, or 
Debarment by the Secretary

    Comment: Some commenters expressed concern about the case transfer 
provisions in the rule.
    Response: As discussed above, the Department has modified Sec.  
96.87 to reflect the fact that, if accreditation or approval is 
cancelled, the plans required by Sec. Sec.  96.33(e) and 96.42(d) will 
govern any transfer of Convention cases and adoption records. As with 
Sec.  96.77, the provision has been modified to require the accrediting 
entity to assist the Department in helping the agency or person to 
transfer its Convention cases and adoption records if the agency or 
person is unable to transfer Convention cases and adoption records as 
planned. Please see the response to comment 2 on Sec.  96.77 for 
further explanation.

Section 96.88--Review of Suspension, Cancellation, or Debarment by the 
Secretary

    Comment: Commenters express concern about the absence of 
administrative review and the possibility of ``a few entities or 
individuals being able to essentially shut down an agency with no 
recourse.'' Commenters request that a ``full review board'' for the 
Department's adverse actions be put in place.
    Response: The IAA does not provide for administrative review of 
suspension, cancellation or debarment by the Department, except to the 
extent that section 204(b)(2) of the IAA provides that the Department 
may terminate a suspension or authorize re-application for 
accreditation or approval if it is satisfied that the deficiencies 
underlying a suspension or cancellation of accreditation or approval 
have been corrected. Reinstatement in such circumstances is provided 
for under Sec.  96.84 of the rule, and the Department has modified 
Sec.  96.88(a) to clarify the point that this is the only non-judicial 
review procedure available. Sections 96.84(b) and 96.86(c) have been 
added to clarify that the Department may withdraw a cancellation, 
suspension, or debarment if the Department concludes that the action 
was based on a mistake of fact or was otherwise in error. These 
provisions are consistent with the overall structure of the IAA.

Subpart M--Dissemination and Reporting of Information by Accrediting 
Entities

    Subpart M is organized in the same way as in the proposed rule, and 
includes Sec.  96.90 (Scope); Sec.  96.91 (Dissemination of information 
to the public about accreditation and approval status); Sec.  96.92 
(Dissemination of information to the public about complaints against 
accredited agencies and approved persons); and Sec.  96.93 (Reports to 
the Secretary about accredited agencies and approved persons and their 
activities); and Sec.  96.94 (Reserved).
    Sections 96.92-96.93 have been revised in response to public 
comment, as described below. In addition, while Sec.  96.91 of the 
proposed rule would have required an accrediting entity to provide a 
summary of the accreditation or approval study of an agency or person 
upon request, after further consideration of the burden and cost impact 
on accrediting entities, we have eliminated this provision. We believe 
that the other information accrediting entities are required to give 
the public is sufficient to allow prospective adoptive parent(s) to 
make informed decisions, and eliminating this requirement will assist 
in minimizing accreditation fees.

Section 96.91--Dissemination of Information to the Public About 
Accreditation and Approval Status

    1. Comment: Several commenters suggest that information about 
accreditation and approval status should be posted on the Department's 
website. One commenter also suggests that information be made available 
by e-mail upon request.
    Response: Information about accreditation and approval status will 
be available through the accrediting entities. The Department will have 
information about all accrediting entities posted on its website. Also, 
the Department will send the names of accredited agencies and approved 
persons to the Hague Permanent Bureau for dissemination on its website. 
These arrangements are consistent with the respective roles of the 
accrediting entities and the Department under the IAA.
    2. Comment: Commenters request that the Department clarify the 
scope and methods to be used to disclose information to the public 
regarding accredited agencies and approved persons under Sec.  96.91. 
One commenter further suggests that an accrediting entity be afforded 
the discretion to make the information that it is required to make 
available on a quarterly basis under Sec.  96.91(a), available on a 
more regular basis.
    Response: The Department does not believe that it is necessary to 
set out in the regulation the methods which accrediting entities may 
use to meet the disclosure requirements of Sec.  96.91. The Department 
expects to address this issue in the agreements with the accrediting 
entities.
    Once the Convention has entered into force for the United States, 
accrediting entities will be required to make available to the public 
information about accredited agencies and approved persons on a 
quarterly basis, pursuant to Sec.  96.91(a). Section 96.91(a) does not 
prohibit accrediting entities from making such information available on 
a more frequent basis. The information that accrediting entities will 
be required to disclose to the public quarterly includes the names and 
contact information for each agency and person it has accredited or 
approved and the names of agencies and persons to which it has denied 
accreditation or approval that have not subsequently been accredited or 
approved. Accrediting entities will also have to provide the names of 
those who have been subject to suspension, cancellation, or refusal to 
renew accreditation or approval; those who have had their temporary 
accreditation withdrawn; or who have been debarred, as well as any 
information specifically authorized in writing by the accredited agency 
or approved person to be disclosed to the public.
    In addition, upon request, accrediting entities will have to make 
available to the public confirmation of whether a specific agency or 
person has been subject to suspension, cancellation, refusal to renew, 
or withdrawal of temporary accreditation or approval or has been 
debarred, and a brief statement of the reasons for the action. Upon 
request, accrediting entities will also have to confirm whether an 
agency or person has a pending application for accreditation or 
approval and the status of the application. Finally, once the 
Convention has entered into force for the United States, accrediting 
entities will be required to disclose information, upon request, on 
substantiated complaints under Sec.  96.92.
    3. Comment: One commenter suggests that accredited agencies and 
approved persons should provide information required under subpart M to 
parent(s) immediately upon initiating a relationship. Another commenter 
thinks that agencies or persons should be required to disclose any 
adverse actions or complaints directed against them to parent(s) before 
a referral of a child is made, so that prospective adoptive parent(s) 
can make an informed decision regarding that agency or person. Another 
commenter supports the provision as written.

[[Page 8125]]

    Response: The Department is not revising Sec.  96.91 to apply to 
agencies and persons as well as to accrediting entities. The purpose of 
this provision is to allow clients, if they wish, to get critical 
information from one source--the accrediting entities--instead of by 
seeking information from each individual agency or person. We believe 
that requiring accrediting entities to provide information to the 
public about accredited agencies and approved persons will assist the 
public in making informed decisions when choosing an adoption service 
provider. Clients will, of course, also remain free to seek information 
directly from agencies and persons.
    We note also that Sec.  96.39 of subpart F sets forth standards on 
information disclosure by agencies and persons to the general public 
and to prospective clients, and Sec.  96.41 sets forth standards 
requiring agencies and persons to provide information on complaint 
procedures to clients.
    4. Comment: A commenter recommends adding a fourth provision under 
Sec.  96.91(b) that requires that each accrediting entity make 
available to individual members of the public upon specific request any 
information concerning a specific agency or person except: (A) 
information identifying prospective or actual adoptive parents, birth 
parents or adoptees; (B) complaints which have been determined to be 
false or unsubstantiated; and (C) complaints being investigated by the 
Complaint Registry or accrediting entity that were filed less than six 
months earlier.
    Response: Requiring accrediting entities to provide ``any'' 
information concerning a specific agency or person would be too 
burdensome on accrediting entities. While subpart M is intended to help 
clients make informed decisions about accredited agencies and approved 
persons, it only indirectly furthers the main purpose of the IAA and 
these implementing regulations, which is to ensure that agencies and 
persons comply with the Convention and the IAA. Thus, we have not 
modified subpart M to impose such a public reporting requirement on 
accrediting entities.

Section 96.92--Dissemination of Information to the Public About 
Complaints Against Accredited Agencies and Approved Persons

    Comment: Several commenters believe that requiring the accrediting 
entity to disclose information on both substantiated and 
unsubstantiated complaints against an agency or person could promote 
rumors, speculation, or otherwise undue prejudice toward that agency or 
person. Commenters recommend that only information about substantiated 
complaints should be made available to the public.
    Response: The Department has revised Sec.  96.92 to require 
reporting only of substantiated complaints. The Department believes 
that requiring accrediting entities to report to the public only 
substantiated complaints against an agency or person is sufficient 
protection for potential clients. It will also reduce the reporting 
burden on accrediting entities and may, therefore, reduce the cost of 
accreditation or approval.

Section 96.93--Reports to the Secretary About Accredited Agencies and 
Approved Persons and Their Activities

    Comment: One commenter recommends that reports to the Department 
about accredited agencies and approved persons should be made public 
because the information contained would be useful to prospective 
adoptive parent(s) who are evaluating those agencies and persons. 
Others are concerned about the cost and burden of requiring accrediting 
entities to make quarterly reports to the Department.
    Response: Some of the information contained in an accrediting 
entity's report to the Department will be available to the public, upon 
request to the accrediting entity, pursuant to Sec. Sec.  96.91 and 
96.92. We do not think it necessary or appropriate to include further 
provisions addressing when and how any other portions of the 
accrediting entities' reports to the Department would be available to 
the public, because such disclosures would be covered by Federal laws 
on access to records and information.
    In response to general concerns about the potential impact of the 
reporting requirements on accreditation fees, we have modified Sec.  
96.93 so that the reports to the Department under Sec.  96.93(a) are 
required on a semi-annual rather than a quarterly basis.

Subpart N--Procedures and Standards Relating to Temporary Accreditation

    Subpart N is organized in the same way as in the proposed rule, and 
includes Sec.  96.95 (Scope); Sec.  96.96 (Eligibility requirements for 
temporary accreditation); Sec.  96.97 (Application procedures for 
temporary accreditation); Sec.  96.98 (Length of temporary 
accreditation period); Sec.  96.99 (Converting an application for 
temporary accreditation to an application for full accreditation); 
Sec.  96.100 (Procedures for evaluating applicants for temporary 
accreditation); Sec.  96.101 (Notification of temporary accreditation 
decisions); Sec.  96.102 (Review of temporary accreditation decisions); 
Sec.  96.103 (Oversight by accrediting entities); Sec.  96.104 
(Performance standards for temporary accreditation); Sec.  96.105 
(Adverse action against a temporarily accredited agency by an 
accrediting entity); Sec.  96.106 (Review of the withdrawal of 
temporary accreditation by an accrediting entity); Sec.  96.107 
(Adverse action against a temporarily accredited agency by the 
Secretary); Sec.  96.108 (Review of the withdrawal of temporary 
accreditation by the Secretary); Sec.  96.109 (Effect of the withdrawal 
of temporary accreditation by the Secretary); Sec.  96.110 
(Dissemination and reporting of information about temporarily 
accredited agencies); and Sec.  96.111 (Fees charged for temporary 
accreditation).
    The Department has made a number of changes to the provisions of 
subpart N to parallel changes made in the subparts of the rule that 
apply to accreditation and approval. As described below, we have also 
removed from Sec.  96.103 language that was duplicative of language in 
Sec.  96.111, and have further clarified how fees may be charged for 
site visits.

Section 96.95--Scope

    Comment: One commenter believes that the temporary accreditation 
process goes against the intention of Congress and does not address the 
needs of small agencies for which the provision was intended. The 
commenter states that the IAA used the term ``registration'' to 
describe the ``phase-in'' process, which would imply less time and 
expense than temporary accreditation.
    Response: We have not changed the provisions on temporary 
accreditation because we believe they are consistent with both the IAA 
and the Convention. The IAA does use the term ``registration'' in the 
heading of the section on temporary accreditation, but it is clear 
that, regardless of what it is called, the short-term transitional 
accreditation process is to be more than a mere sign-up procedure. 
(Allowing agencies to conduct Convention adoptions based on a mere 
sign-up procedure would be difficult, if not impossible, to justify as 
consistent with the Convention.) The IAA criteria for applying for 
temporary accreditation are less comprehensive than those required for 
full accreditation, yet the statute still requires that an agency 
demonstrate basic competency to perform Convention adoptions.
    The Department deliberately uses the term temporary accreditation, 
rather

[[Page 8126]]

than ``registration,'' to highlight that temporary accreditation, as 
envisioned in the IAA, is a stepping-stone to full accreditation; 
temporary accreditation is meant to allow small agencies a short period 
of time to gather the information and resources necessary to achieve 
full accreditation. Temporary accreditation is not a permanent, ongoing 
status for small agencies, but is available only as the Convention 
first enters into force for the United States, and is a status limited 
to, at most, two years. Eventually, small agencies must meet the full 
accreditation standards in subpart F to provide adoption services in 
Convention cases, or choose to provide adoption services in Convention 
cases only as supervised or exempted providers.
    The eligibility requirements for temporary accreditation are more 
detailed than the broadly worded criteria in the IAA, but they are all 
based in the statute. For example, section 203(c)(3)(E) of the IAA 
requires that an agency that wishes to get temporary accreditation show 
that it ``has not been found to be involved in any improper conduct 
relating to intercountry adoptions.'' The Department's regulations at 
Sec.  96.96(a)(5) describe what agency behavior would be considered 
``improper conduct'' including, (i) a suspension of its State license; 
(ii) a recent finding of fault or liability in an administrative or 
judicial action; or (iii) a recent finding of criminal fraud or 
financial misconduct. These requirements, together with the performance 
standards required to maintain temporary accreditation set out in Sec.  
96.104, are still significantly less involved than the standards for 
full accreditation. Given the difference between the requirements for 
full and temporary accreditation, it should take small agencies less 
time and expense to obtain temporary accreditation than it would to get 
full accreditation. The Department believes that the temporary 
accreditation framework will help maintain a diverse array of adoption 
service providers that are available to place children eligible for 
adoption and to assist birth families and prospective adoptive 
families. At the same time, the temporary accreditation framework will 
help to ensure that temporarily accredited agencies can still comply 
with the basic provisions of the Convention and the IAA.

Section 96.96--Eligibility Requirements for Temporary Accreditation

    1. Comment: Commenters support the temporary accreditation 
provision, particularly to the extent it may benefit small agencies.
    Response: No response is required to these comments.
    2. Comment: One commenter states that the current threshold for the 
number of cases in which adoption services are performed by an agency 
seeking temporary accreditation does not offer sufficient relief for 
small agencies. Many commenters request that the threshold for 
temporary accreditation be based solely upon the number of Convention 
cases. Other commenters want the threshold to be raised to 200 cases 
for one year or 100 cases for two years of temporary accreditation.
    Response: The threshold number of cases for temporary accreditation 
is established by section 203(c) of the IAA, which provides that an 
agency can get temporary accreditation for a period of one year if it 
has ``provided adoption services in fewer than 100 intercountry 
adoptions in the preceding calendar year,'' and for two years if it has 
``provided adoption services in fewer than 50 intercountry adoptions in 
the preceding calendar year.''
    Consistent with the IAA, all ``intercountry adoptions,'' will count 
toward the threshold number. Prior to entry into force of the 
Convention for the United States, no Convention adoptions would have 
been performed in the United States, regardless of the size of the 
agency. There is also no basis for reading the term ``intercountry 
adoptions'' in this provision of the IAA to mean ``intercountry 
adoptions that would have been Convention adoptions had the Convention 
been in force in the United States at the time they were performed.''
    3. Comment: One commenter strongly suggests that there should be no 
extensions of temporary accreditation, under any circumstances.
    Response: The rule does not allow any such extensions. Under the 
IAA, temporary accreditation is a one-time status that is available 
only for a period of time immediately after the Convention enters into 
force.
    4. Comment: One commenter requests clarification of what 
constitutes a small agency under Sec.  96.96(a)(1). It is an agency 
that arranges approximately 20 adoptions per year, but that also 
conducts over 100 home studies. It questions whether it would qualify 
as a small agency, given that home studies are considered an adoption 
service.
    Response: After careful review, we have concluded that an agency 
that arranges 20 adoptions and conducts over 100 home studies a year 
would not qualify for temporary accreditation. Section 203(c) of the 
IAA provides expressly that agencies that have ``provided adoption 
services in fewer than 100 intercountry adoptions'' in the calendar 
year preceding entry into force of the Convention can be temporarily 
accredited for a one year period (or for a two year period, if 
performing adoption services in fewer than 50 intercountry adoptions). 
As the commenter correctly notes, ``adoption service'' is defined in 
section 3 of the IAA, and is used throughout the IAA, to include home 
studies. Accordingly, the commenting agency is providing one of the six 
enumerated ``adoption services'' in over 100 cases. Assuming these 
services were provided by the agency in the calendar year preceding 
entry into force of the Convention, the agency would not qualify for 
temporary accreditation.
    The fact that such an agency cannot qualify for temporary 
accreditation does not mean that it must pursue full accreditation to 
continue its work, however. After the Convention enters into force, it 
could act as an ``exempted provider'' in those cases in which the 
agency performs only home studies, and it could act as a supervised 
provider in those few Convention adoptions in which it performs 
additional adoption services.
    The Department considered whether, notwithstanding its plain 
language, section 203(c) of the IAA could be construed to exclude home 
studies from adoption services on the possible ground that, after the 
Convention comes into force, providers that perform only a home or 
child background study, and no other adoption service in a case, will 
be excepted by IAA section 201(b) from the section 201(a) requirement 
that all adoption services be provided by an accredited, approved, or 
supervised provider. We are satisfied that the answer to this question 
is no. As just explained, the plain language of section 203(c) directs 
us to consider all cases in which adoption services are provided when 
determining eligibility for temporary accreditation, and home studies 
are an adoption service. While section 201(b) exempts home or child 
background study providers from meeting the accreditation, approval, or 
supervision requirement when the home or child background study is the 
only service they provide in a case, the exemption does not change the 
fact that a home or child background study is an adoption service. 
Instead the exemption recognizes special circumstances in which a 
provider will not be required to be accredited, approved or supervised. 
Accreditation, approval, or supervision of home or child background 
study providers is still required if the home or child background study 
is performed in

[[Page 8127]]

conjunction with other adoption services on a case. Moreover, the 
purpose of IAA section 203(c) is to determine who is qualified for 
temporary accreditation based on the historic volume of cases in which 
an applicant has provided adoption services prior to entry into force 
of the Convention. This retrospective rule has an entirely different 
function than the forward-looking rule for determining, under IAA 
section 201, which providers need to be accredited, approved, or 
supervised after entry into force of the Convention. The fact that 
providers of home studies in some circumstances do not need to be 
accredited, approved, or supervised after entry into force is not 
inconsistent with the fact that home studies are counted as ``adoption 
services'' for the purposes of determining whether an agency that 
wishes to become accredited can first be temporarily accredited.
    Accordingly, assuming the commenter performs its current volume of 
adoption services in the year preceding entry into force of the 
Convention, the options available to the commenter under the statute 
and regulations will be either to obtain full accreditation, or to 
operate as an exempted or supervised provider.
    5. Comment: A commenter suggests that limiting eligibility to 
agencies that have provided adoption services for three years prior to 
the transitional application deadline (TAD) will exclude small agencies 
that have recently received their State licenses. Others think 
requiring a license for five years prior to the TAD is more 
appropriate. One commenter suggests that temporary accreditation should 
be available to any group that wishes to form a new adoption agency, 
otherwise the creation of new agencies will be discouraged, and the 
number of agencies available to prospective adoptive parent(s) will be 
severely limited.
    Response: The requirement that an agency must have provided 
adoption services for at least three years prior to the TAD before it 
is eligible for temporary accreditation was taken directly from section 
203(c)(3)(B) of the IAA. The Department believes that it is 
unnecessary--and would be inconsistent with the purpose of the 
temporary accreditation provisions of the IAA--to require by regulation 
that small agencies have provided services for a specific time period 
longer than 3 years.
    6. Comment: Some commenters suggest that agencies should be subject 
to more stringent requirements for temporary accreditation than those 
in the proposed rule.
    Response: The Department is not modifying the standards for 
temporary accreditation based on this comment. We believe that they are 
consistent with the IAA's provisions on temporary accreditation and 
strike the proper balance between ensuring that agencies can provide 
adoption services in the manner required under the IAA and the 
Convention and minimizing the impact on small agencies.

Section 96.98--Length of Temporary Accreditation Period

    Comment: One commenter suggests that the period of temporary 
accreditation be one year, not two years.
    Response: The Department does not have the authority to vary the 
lengths of the temporary accreditation periods from the periods set in 
the IAA. Section 203(c) of the IAA provides that an agency can get 
temporary accreditation for a period of one year if it has ``provided 
adoption services in fewer than 100 intercountry adoptions in the 
preceding calendar year,'' and for two years if it has ``provided 
adoption services in fewer than 50 intercountry adoptions in the 
preceding calendar year.''

Section 96.100--Procedures for Evaluating Applicants for Temporary 
Accreditation

    Comment: A commenter supports allowing accrediting entities to use 
site visits to determine an agency's eligibility for temporary 
accreditation, but the commenter recommends that accrediting agencies 
rely primarily on documentation when evaluating applications for 
temporary accreditation in order to minimize the burden and cost for 
small agencies.
    Response: The Department agrees with the thrust of this comment but 
does not believe the regulation should be modified to specifically 
require primary reliance on documentation. The rule, as written, 
strikes an appropriate balance between minimizing the burden and cost 
for small agencies to get temporarily accredited and ensuring that 
temporarily accredited agencies can provide satisfactory adoption 
services to families. If the accrediting entity is satisfied, after 
reviewing the documentation submitted by an agency, that an agency is 
qualified for temporary accreditation, then Sec.  96.100(b) permits the 
accrediting entity to forego a site visit.

Section 96.102--Review of Temporary Accreditation Decisions

    Comment: Several commenters raise concerns over the limits of 
judicial and/or administrative review of a denial of full or temporary 
accreditation.
    Response: These rules treat denial of temporary accreditation the 
same as the denial of an initial application for full accreditation or 
approval. For a discussion of why this rule does not permit review of 
initial denials of full or temporary accreditation, please see the 
response to comments on Sec.  96.59.

Section 96.103--Oversight by Accrediting Entities

    1. Comment: Several commenters think that the provision in Sec.  
96.103(b) in the proposed rule allowing the accrediting entity to 
assess additional fees for actual costs incurred is arbitrary because 
the accrediting entity, at its discretion, can visit the agency at the 
agency's expense. One commenter suggested that the Department set 
parameters for extraordinary cases to protect agencies from unnecessary 
fees.
    Response: The Department does not believe it is appropriate to 
assume that designated accrediting entities will arbitrarily conduct 
site visits in order to generate fees. Accreditation fees may not 
exceed actual costs, so conducting site visits will not be a financial 
windfall for accrediting entities.
    The Department has, however, eliminated from Sec.  96.103 language 
duplicative of Sec.  96.111's authorization of charges and fees related 
to site visits. The ability of an accrediting entity to charge fees for 
a site visit is unaffected by this change. The Department has also 
added language to Sec.  96.111(a) to clarify that an accrediting entity 
may require the payment of estimated additional fees for a site visit 
in advance, subject to a refund of any overcharge.
    2. Comment: One commenter suggests that the Department itself 
closely monitor small agencies.
    Response: The accrediting entities will have primary oversight 
responsibility for agencies that they have granted temporary 
accreditation. The Department, nevertheless, retains oversight 
responsibility for agencies of all sizes. The Department has 
independent authority under Sec.  96.107 to withdraw an agency's 
temporary accreditation if the agency is substantially out of 
compliance with the standards in Sec.  96.104 and the accrediting 
entity has failed or refused to take appropriate enforcement action, or 
if the Department finds such action will protect the interests of 
children, further U.S. foreign policy or national security interests, 
or protect the ability of U.S. citizens to adopt children under the 
Convention.

[[Page 8128]]

Section 96.105--Adverse Action Against a Temporarily Accredited Agency 
by an Accrediting Entity

    Comment: Comments pertaining to Sec. Sec.  96.76 and 96.77 also 
relate to this temporary accreditation counterpart.
    Response: Changes made to Sec.  96.105 and Sec.  96.109(c) were 
made to conform to the approach taken in Sec.  96.76. Please see the 
discussion under Sec. Sec.  96.76 and 96.77 for relevant comments and 
responses.

Section 96.106--Review of the Withdrawal of Temporary Accreditation by 
the Accrediting Entity

    Comment: Comments pertaining to Sec.  96.79(a) also relate to this 
section as its temporary accreditation counterpart.
    Response: The Department made minor changes to Sec.  96.106(a) to 
conform with the approach taken in Sec.  96.79(a).

Section 96.107--Adverse Action Against a Temporarily Accredited Agency 
by the Secretary

    Comment: Comments pertaining to Sec.  96.83 also relate to this 
section as its temporary accreditation counterpart.
    Response: The Department made conforming changes to Sec.  96.107(b) 
consistent with changes that it made to Sec.  96.83(b). Please see the 
discussion under Sec.  96.83 for the relevant comment and response.

Section 96.109--Effect of the Withdrawal of Temporary Accreditation by 
the Accrediting Entity or the Secretary

    Comment: Comments pertaining to Sec. Sec.  96.77(b) and (c) also 
relate to this section as its temporary accreditation counterpart.
    Response: The Department made conforming changes to Sec.  96.109(a) 
and (b) consistent with changes that it made to Sec.  96.77(b) and (c). 
Please see the discussion under Sec.  96.77(b) for relevant comments 
and responses. In addition, the Department clarified the related 
performance standard, in Sec.  96.105(k), to provide that the closure 
plan must include provisions for organized closure and reimbursements 
to clients, mirroring a change made to Sec.  96.33(e). Please see also 
the response to comment 9 on Sec.  96.33.

V. Regulatory Review

A. Regulatory Flexibility Act/Executive Order 13272: Small Business

    The Department has reviewed the final rule's impact on small 
agencies and persons in accordance with the final regulatory analysis 
requirements in the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612. 
The RFA requires an agency to perform a final regulatory flexibility 
analysis at the time that a rule is finalized to determine the 
regulatory impact of the rulemaking on small entities. However, if the 
agency does not believe that the rule will have a significant economic 
impact on a substantial number of small entities the agency may publish 
a certification in lieu of a regulatory analysis, provided that the 
certification is accompanied by a factual basis. As stated in the 
certification for the proposed rule there are between 420 and 600 
adoption service providers, the vast majority of which are small, that 
may have to comply with this rulemaking. Accordingly, the rule will 
impact a substantial number of small entities. However, for the reasons 
provided below, the Department does not believe that the economic 
impact will be significant.
    At the request of the Small Business Administration (SBA), we 
included in the notice of proposed rulemaking the following questions 
on small entity impact for public comment: (1) Will most small agencies 
be eligible for temporary accreditation under the criteria provided in 
subpart N? (2) How many agencies are likely to seek temporary 
accreditation rather than full accreditation? (3) What are the 
accrediting entities likely to charge the agencies for the temporary 
accreditation process? (4) What are the estimated costs agencies will 
have to expend to comply with the standards in subpart N? (5) Will 
small agencies be negatively impacted if they are unable to qualify for 
temporary accreditation? We received no comments responding 
specifically to the questions posed by the SBA, but we summarize and 
address below the comments which we did receive related to the impact 
on small entities of this rule:
    Comment: Six commenters expressed concern about accreditation fees 
and believe that accreditation fees could range from $45,000 to 
$100,000 per applicant.
    Response: Consistent with the IAA, accrediting entities will be 
authorized to charge agencies and persons fees to cover the cost of 
conducting the accreditation process, which in the case of full 
accreditation or approval will include: (1) Reviewing an applicant's 
written application; (2) verifying the information the applicant 
provided by examining underlying documentation; (3) considering written 
complaints; (4) conducting off-site or in-person interviews; (5) 
consulting with relevant State licensing authorities; (6) conducting a 
site visit; and (7) taking adverse action and defending any legal 
challenges to enforcement measures. Providing for these core duties is 
unavoidable.
    We have nevertheless sought to minimize the impact of 
accreditation/approval fees in a number of ways that will benefit small 
agencies and persons. First, there are safeguards on accrediting entity 
fees in the IAA that are mirrored in the final rule. In particular, the 
IAA prohibits such fees from exceeding the costs of accreditation/
approval. In addition, the Department must approve the accreditation/
approval fees assessed by accrediting entities. In setting fees, the 
Department and the accrediting entities must consider the relative 
size, the geographic location, and the number of Convention adoption 
cases managed by the agencies or persons expected to apply, thus there 
will be consideration of the impact of proposed fees on small agencies 
and persons. A fee schedule submitted to the Department for approval 
must contain: (1) A list of separate non-refundable fees for Convention 
accreditation and Convention approval; (2) the cost of all activities 
associated with the accreditation/approval cycle; and (3) the cost of 
obtaining temporary accreditation services (if provided by the 
accrediting entity). Also, accrediting entities will be required to 
provide clear information on fees to the public, including making their 
fee schedules available to the public and listing the fees to be 
charged to the applicant in a contract between the parties. The 
Department believes that the safeguards in the final rule will minimize 
the costs of accreditation fees for small entities. The Department, 
however, cannot predict or guarantee any particular range of fees prior 
to designating the accrediting entities and approving their fee 
schedules.
    Second, small agencies may pursue the option of temporary 
accreditation. Small agencies that fulfill certain criteria may be 
temporarily accredited for one or two years, depending upon size. The 
applicable standards for temporary accreditation are less comprehensive 
than the standards for full accreditation. Also, obtaining temporary 
accreditation is an abbreviated process--a site visit is optional, not 
required. The Department expects the fees associated with the cost of 
temporary accreditation to be less than the fees for full 
accreditation.
    Third, an agency or person can assist with adoptions under the 
Convention without becoming accredited or approved, and can therefore 
avoid paying accreditation/approval fees by acting under the 
supervision of an accredited agency or approved person.

[[Page 8129]]

    Finally, the IAA and the regulations exempt certain service 
providers from the requirements of accreditation/approval. For example, 
a social work professional or organization that performs a home study 
or child background study in the United States, but is not currently 
providing and has not previously provided any other adoption service in 
connection with a particular Convention adoption, is an ``exempted 
provider.'' Exempted providers do not have to be accredited, 
temporarily accredited, approved, or supervised by a primary provider. 
Thus small home study providers and individual social workers that 
provide only home studies or child background studies will not have to 
pay to become accredited or approved.
    Comment: One commenter is concerned that private accrediting 
entities will charge excessive fees for travel and accommodations 
during the accreditation process.
    Response: We address the costs of site visit evaluations in this 
final rule. Section 96.8(b)(2) provides that separate fees based on 
actual costs incurred may be charged for the travel and maintenance of 
evaluators, and Sec.  96.111(a) also requires that additional fees be 
paid for actual costs involved with site visits to temporarily 
accredited agencies. These costs are easily verified through receipts 
for travel expenses. Additionally, State licensing authorities and 
nonprofit entities chosen to be accrediting entities are likely to have 
travel policies that provide internal limits on payments for expenses 
such as travel, meals, and accommodations. In addition, the Department 
can address this issue in the agreements with the accrediting entities. 
The rule provides sufficient safeguards to ensure that the travel 
charges are not burdensome to small entities and to ensure the 
reasonableness of charges for the travel and maintenance of site 
evaluators.
    Comment: Nine commenters believe that it will create great economic 
hardship for small agencies and persons to comply with the standards 
found in subpart F. A few commenters write that complying with the 
standards of subpart F will be so costly that many small agencies and 
persons could be forced to close. Other commenters are concerned that 
increased costs for agencies and persons will be passed on to 
prospective adoptive parent(s).
    Response: The Department is aware that the cost of providing 
adoption services in Convention cases will be affected by the cost of 
complying with the standards in subpart F, and discussed that impact at 
length in the explanatory statement to the proposed rule issued on 
September 15, 2003. The proposed rule preamble at Section VI, A 
contains an analysis of the impact on small entities. After considering 
the public comments, the Department continues to believe that the basis 
and conclusions of that analysis are sound. That analysis therefore is 
hereby incorporated by reference and available at 68 FR 54064, 54089-
54090 (September 15, 2003).
    We have taken a number of steps, however, in the final rule to be 
responsive to the comments on the costs of compliance, while at the 
same time keeping in mind the specific IAA requirements for certain 
standards and the overall statutory goals of protecting the best 
interests of a child and of protecting birth parents, adoptive parents, 
and children from abuses. For example, we revisited and changed, to 
lower the impact on small entities, the standards relating to the 
following issues:
     Risk assessment; primary provider's liability; waivers of 
liability;
     Budget and audit;
     Training and education of social service personnel.
    Under the final rule's standards on risk assessment and liability, 
agencies and persons are not required to retain an independent provider 
to conduct a risk assessment. Instead, they may use in-house personnel, 
thereby reducing the cost of an assessment. Moreover, we revised 
Sec. Sec.  96.45 and 96.46 so that primary providers are no longer 
required to assume tort, contract, and other civil liability to the 
prospective adoptive parent(s) for the supervised provider's provision 
of contracted adoption services or to maintain a bond, escrow account, 
or liability insurance in an amount sufficient to cover the risks of 
liability arising from its work with supervised providers. In addition, 
Sec.  96.39, which prohibited agencies and persons from using blanket 
waivers of liability, has been changed so that agencies and persons may 
ask prospective adoptive parent(s) to sign a waiver after full 
disclosure of information as long as the waiver complies with 
applicable State law and is limited, specific, and based on risks that 
have been discussed and explained in the adoption services contract. By 
changing these standards, we believe that we have decreased the risk 
exposure of primary providers so that they will more easily obtain the 
required insurance at a reasonable cost. In total, the revision of 
these standards makes compliance easier by decreasing the cost and 
burden on small agencies and persons.
    With regard to budget and audit standards, we modified the language 
of Sec.  96.33 to make meeting the budget standards more practicable 
while still maintaining a focus on an agency's or person's financial 
soundness. The proposed rule required agencies to keep three months of 
cash reserves on hand. The final rule instead requires the assets on-
hand to be sufficient to meet two months of expenses and allows 
agencies to satisfy the standard by including non-cash assets. In 
addition, the agency or person's finances are subject to an independent 
audit every four years instead of annually as initially proposed. 
Requiring less cash on hand and reducing the frequency of independent 
audits will enable small agencies and persons to demonstrate financial 
soundness without incurring significant new costs.
    We have also considered the concerns of commenters who believed 
that the education and experience requirements for social service 
personnel would be too costly and have made cost-saving changes. The 
final rule differs from the proposed rule in that non-supervisory 
employees who are conducting home studies or child background studies 
are not required to hold a master's degree in social work. The final 
rule requires that these personnel be authorized or licensed to 
complete a home study under the laws of the State in which they 
practice, meet DHS requirements for home study preparers, and be 
monitored by a qualified social work supervisor. Likewise, we reduced 
from 20 hours each year to 30 hours every two years the training 
requirement for employees who provide adoption services that involve 
clinical skills and judgment.
    While some commenters also were concerned about the potential cost 
of standards involving data collection, the Department did not 
significantly modify the standards related to data collection. Section 
104 of the IAA lists the information and data that must be collected 
and reported to Congress annually. To ensure the availability of this 
information, Sec.  96.43 of the rule still requires accredited agencies 
and approved persons who are acting as primary providers to track 
cases, to collect data, and to report the information as set forth in 
the rule.
    The Department also has considered input on the costs to agencies 
and persons of complying with the standards in subpart F. The cost 
information from commenters ranged widely--some commenters predicted 
complying with subpart F could cost from $75,000 to $100,000 per agency 
or person. Others suggested that a range of

[[Page 8130]]

$2,000 to $3,000 per case in increased costs that agencies and persons 
would have to charge for adoption services. (Commenters were not always 
clear about whether these projections included accreditation/approval 
fees or just the cost of complying with the standards in subpart F.) We 
reviewed the standards, and concluded that they are either required by 
section 203(b) of the IAA or will otherwise further the goals of the 
IAA.
    In summary, the Department asserts that the economic impact on 
small entities will not be significant. The final rule allows agencies 
and persons to choose to be accredited or approved or to act as 
supervised providers; largely exempts certain types of very small 
providers, specifically home study and child background study 
preparers; includes a special temporary accreditation procedure just 
for small agencies; and uses a substantial compliance structure, so 
that entities are not required to comply fully with every single 
standard in order to be accredited or approved. The Department hereby 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities.

B. The Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule, as defined by 5 U.S.C. 804, for 
purposes of congressional review of agency rulemaking under the Small 
Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-
121. This rule will not result in an annual effect on the economy of 
$100 million or more; a major increase in costs or prices; or, 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
import markets.

C. The Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UFMA), 
Public Law 104-4; 109 Stat. 48; 2 U.S.C. 1532, generally requires 
agencies to prepare a statement, including cost-benefit and other 
analyses, before proposing any rule that may result in an annual 
expenditure of $100 million or more by State, local, or tribal 
governments, or by the private sector. Section 4 of UFMA, 2 U.S.C. 
1503, excludes legislation necessary for implementation of treaty 
obligations. The IAA falls within this exclusion because it is the 
implementing legislation for the Convention. In any event, this rule 
will not result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any year. Moreover, because this rule will not 
significantly or uniquely affect small governments, section 203 of 
UFMA, 2 U.S.C. 1533, does not require preparation of a small government 
agency plan in connection with it.

D. Executive Order 13132: Federalism

    A rule has federalism implications under Executive Order 13132 if 
it has a substantial direct effect on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
The federalism implications of the rule in light of the requirements of 
the IAA are discussed in Section IV paragraph (D) of the proposed rule 
in the preamble. In light of that analysis, the Department finds that 
this regulation will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, the Department has determined that 
this rule does not have sufficient federalism implications to require 
consultations or to warrant the preparation of a federalism summary 
impact statement under section 6 of Executive Order 13132.
    Comment: Some commenters argued that State licensing should be 
sufficient for Convention accreditation and that the Department should 
not require agencies to become accredited at the Federal level, while 
others argued that the regulations deferred too much to State licensing 
of agencies.
    Response: Federal accreditation standards for intercountry 
adoptions under the Convention are required to implement the Convention 
and the IAA; State licensing or authorization to provide adoption 
services is not sufficient to meet the requirements of the Convention 
or the IAA. While the Department considered State licensing practices 
in crafting the rule, as required by section 203(a)(2) of the IAA, the 
rule contains Federal standards related specifically to the minimum 
standards of section 203(b) of the IAA. These IAA-related standards, 
and standards related to compliance with the Convention, may or may not 
be part of a particular State's licensing requirements for adoption 
agencies.

E. Executive Order 12866: Regulatory Review

    This regulation has been reviewed by the Office of Management and 
Budget.

F. Executive Order 12988: Civil Justice Reform

    The Department has reviewed these regulations in light of sections 
3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, 
minimize litigation risks, establish clear legal standards, and reduce 
burden. The Department has made every reasonable effort to ensure 
compliance with the requirements in Executive Order 12988.

G. The Paperwork Reduction Act of 1995

    This rule does not impose information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C., 
Chapter 35. Section 503(c) of the IAA specifically exempts from the PRA 
information collection for several purposes, including information 
collections for purposes of IAA section 202(b)(4), which relates to 
data collection, records maintenance, and reporting by the accrediting 
entities. In accord with this and the other IAA exemptions from the 
PRA, at the time of the proposed rule the Department determined that 
all of the collections of information contained in the rule were exempt 
from PRA requirements, with the exception of the third-party 
disclosures contained in Sec. Sec.  96.91 and 96.92 of subpart M. The 
Department has modified Sec.  96.91 and Sec.  96.92 and, after re-
examining the language, purpose, and history of IAA section 503(c)'s 
broad PRA exemption addressing the information collection and 
management duties of accrediting entities, has concluded that the 
disclosure requirements in these sections, like the rest of the 
information collections in this rule, are exempted from the PRA. The 
explanation of the IAA exemptions to the PRA were explained in the 
Department's preamble to the proposed rule published on September 15, 
2003 (Section IV, paragraph F), which is incorporated herein by 
reference, to the extent that it is consistent with our conclusion that 
all collections in the final rule are exempt from the PRA. Consistent 
with this conclusion, the request for approval of an information 
collection that was submitted to OMB for review and clearance 
concurrent with the notice of proposed rulemaking has been withdrawn. 
The principal practical effect of recognizing this exemption is that 
the disclosure requirements under Sec.  96.91 and Sec.  96.92 will not 
have to be reviewed under the

[[Page 8131]]

PRA every three years in order to remain effective.
    Although the PRA does not apply to these sections as they have been 
revised, the Department has remained attentive to the regulatory burden 
issues associated with them, and has considered the one comment 
received on the burden estimates for the third-party disclosure 
requirements contained in Sec. Sec.  96.91 and 96.92. The commenter 
suggests that no accurate estimate of PRA burden hours can be made, and 
also suggests increasing the estimate of burden hours.
    The Department did subsequent research and revised its burden 
estimates. We acknowledge that, at this time, it is difficult to 
estimate burdens accurately without knowing the exact numbers of 
agencies and persons that will apply for accreditation or approval. 
Nevertheless, we used information from potential accrediting entities 
to estimate the anticipated burden of the third-party disclosure duties 
required under subpart M. At the time we did the original estimates, we 
believed we might have up to nine accrediting entities. We currently 
have six candidates eligible to become accrediting entities. In 
response to this comment, we contacted all six current accrediting 
entity candidates and asked them to estimate the additional burden in 
hours and dollars to comply with the third-party disclosure 
requirements set forth in Sec.  96.91 (Dissemination of information to 
the public about accreditation and approval status) and Sec.  96.92 
(Dissemination of information to the public about complaints against 
accredited agencies and approved persons) of the proposed rule. Those 
estimates ranged from less than 26 hours per year to as high as 459 
hours per year. The Department thought it prudent to be conservative, 
so we used the highest estimate we were given, 459 hours, which added 
an additional 94 hours per year to our previous estimate. In addition, 
using the highest cost estimate, we added an additional $1,924.00 per 
year to our previous estimate for yearly maintenance costs, for an 
estimated annual maintenance cost burden of $12,879.00. While these 
average burden estimates each increased slightly, the overall burden 
estimate went down because the number of eligible accrediting entity 
candidates has decreased from 9 to 6. Therefore, each estimate was 
multiplied by 6, rather than 9, to get our total annual burden 
estimates. Thus, our new burden estimates for the proposed rule would 
be: 2754 hours per year (459 hours multiplied by 6); $63,978.00 for 
total start-up/capital costs ($10,663.00 multiplied by 6); and 
$77,274.00 in annual operation and maintenance costs ($12,879.00 
multiplied by 6). The burden of the final rule would not be any greater 
and is likely to be significantly less because the final rule does not 
require the preparation of a summary of the accreditation or approval 
study.

H. Congressional Review

    This rule is not a major rule as defined in 5 U.S.C. Chapter 8.

I. The Treasury and General Government Appropriations Act of 1999--
Assessment of Federal Regulations and Policies on Families

    In light of the subject matter of these regulations and section 654 
of the Treasury and General Government Appropriations Act of 1999, 
Public Law 105-277, 112 Stat. 2681 (1998), the Department has assessed 
the impact of these regulations on family well-being in accordance with 
section 654(c) of that Act. This rule implements the Convention and the 
IAA requirements related to the accreditation and approval of adoption 
service providers who provide adoption services to families involved in 
an intercountry adoption. This rule will promote child safety, child 
and family well-being, and stability for children in need of a 
permanent family placement through intercountry adoption. The rule will 
help to ensure that agencies and persons are taking appropriate steps 
to protect children and to strengthen and support families involved in 
the intercountry adoption process.
    Comment: The Department received several comments on the effect of 
the regulation on family well-being. Commenters point out that the rule 
will promote child safety and family well-being because the rule is 
consistent with the overall goal of the Convention, which is to place 
children eligible for adoption in permanent family placements. Others 
were concerned that the Convention was not a good idea because they 
believe adoptions from a country typically decrease substantially when 
a country becomes a Convention country, even though there are still 
children eligible for an intercountry adoption. Other commenters were 
concerned about potential increased costs of adoptions and the negative 
effect such cost increases might have on the availability of adoption 
as an option for families.
    Response: We cannot act contrary to the Convention and the IAA. We 
note that the Convention's principles and international norms are 
consistent with section 654's focus on family well-being. As for the 
impact of costs on adoptive families, we have revised the rule in many 
sections to lower the costs of compliance while at the same time trying 
to ensure that the rule contains standards that are required under the 
IAA and/or further its objectives.

List of Subjects in 22 CFR Part 96

    Adoption and foster care, International agreements, Reporting and 
recordkeeping requirements.

0
Accordingly, the Department adds new part 96 to title 22 of the CFR, 
chapter I, subchapter J to read as follows:

PART 96--ACCREDITATION OF AGENCIES AND APPROVAL OF PERSONS UNDER 
THE INTERCOUNTRY ADOPTION ACT OF 2000 (IAA)

Subpart A--General Provisions
Sec.
96.1 Purpose.
96.2 Definitions.
96.3 [Reserved].
Subpart B--Selection, Designation, and Duties of Accrediting Entities
96.4 Designation of accrediting entities by the Secretary.
96.5 Requirement that the accrediting entity be a nonprofit or 
public entity.
96.6 Performance criteria for designation as an accrediting entity.
96.7 Authorities and responsibilities of an accrediting entity.
96.8 Fees charged by accrediting entities.
96.9 Agreement between the Secretary and the accrediting entity.
96.10 Suspension or cancellation of the designation of an 
accrediting entity by the Secretary.
96.11 [Reserved].
Subpart C--Accreditation and Approval Requirements for the Provision of 
Adoption Services
96.12 Authorized adoption service providers.
96.13 Circumstances in which accreditation, approval, or supervision 
is not required.
96.14 Providing adoption services using other providers.
96.15 Examples.
96.16 Public domestic authorities.
96.17 Effective date of accreditation and approval requirements.
Subpart D--Application Procedures for Accreditation and Approval
96.18 Scope.
96.19 Special provision for agencies and persons seeking to be 
accredited or approved as of the time the Convention enters into 
force for the United States.
96.20 First-time application procedures for accreditation and 
approval.
96.21 Choosing an accrediting entity.
96.22 [Reserved].

[[Page 8132]]

Subpart E--Evaluation of Applicants for Accreditation and Approval
96.23 Scope.
96.24 Procedures for evaluating applicants for accreditation or 
approval.
96.25 Access to information and documents requested by the 
accrediting entity.
96.26 Protection of information and documents by the accrediting 
entity.
96.27 Substantive criteria for evaluating applicants for 
accreditation or approval.
96.28 [Reserved].
Subpart F--Standards for Convention Accreditation and Approval
96.29 Scope.

Licensing and Corporate Governance

96.30 State licensing.
96.31 Corporate Structure.
96.32 Internal structure and oversight.

Financial and Risk Management

96.33 Budget, audit, insurance, and risk assessment requirements.
96.34 Compensation.

Ethical Practices and Responsibilities

96.35 Suitability of agencies and persons to provide adoption 
services consistent with the Convention.
96.36 Prohibition on child buying.

Professional Qualifications and Training for Employees

96.37 Education and experience requirements for social service 
personnel.
96.38 Training requirements for social service personnel.

Information Disclosure, Fee Practices, and Quality Control Policies and 
Practices

96.39 Information disclosure and quality control practices.
96.40 Fee policies and procedures.

Responding to Complaints and Records and Reports Management

96.41 Procedures for responding to complaints and improving service 
delivery.
96.42 Retention, preservation, and disclosure of adoption records.
96.43 Case tracking, data management, and reporting.

Service Planning and Delivery

96.44 Acting as primary provider.
96.45 Using supervised providers in the United States.
96.46 Using providers in Convention countries.

Standards for Cases in Which a Child is Immigrating to the United 
States (Incoming Cases)

96.47 Preparation of home studies in incoming cases.
96.48 Preparation and training of prospective adoptive parent(s) in 
incoming cases.
96.49 Provision of medical and social information in incoming cases.
96.50 Placement and post-placement monitoring until final adoption 
in incoming cases.
96.51 Post-adoption services in incoming cases.
96.52 Performance of Convention communication and coordination 
functions in incoming cases.

Standards for Cases in Which a Child is Emigrating From the United 
States (Outgoing Cases)

96.53 Background studies on the child and consents in outgoing 
cases.
96.54 Placement standards in outgoing cases.
96.55 Performance of Convention communication and coordination 
functions in outgoing cases.
96.56 [Reserved].
Subpart G--Decisions on Applications for Accreditation or Approval
96.57 Scope.
96.58 Notification of accreditation and approval decisions.
96.59 Review of decisions to deny accreditation or approval.
96.60 Length of accreditation or approval period.
96.61 [Reserved].
Subpart H--Renewal of Accreditation or Approval
96.62 Scope.
96.63 Renewal of accreditation or approval.
96.64 [Reserved].
Subpart I--Routine Oversight by Accrediting Entities
96.65 Scope.
96.66 Oversight of accredited agencies and approved persons by the 
accrediting entity.
96.67 [Reserved].
Subpart J--Oversight Through Review of Complaints
96.68 Scope.
96.69 Filing of complaints against accredited agencies and approved 
persons.
96.70 Operation of the Complaint Registry.
96.71 Review by the accrediting entity of complaints against 
accredited agencies and approved persons.
96.72 Referral of complaints to the Secretary and other authorities.
96.73 [Reserved].
Subpart K--Adverse Action by the Accrediting Entity
96.74 Scope.
96.75 Adverse action against accredited agencies or approved persons 
not in substantial compliance.
96.76 Procedures governing adverse action by the accrediting entity.
96.77 Responsibilities of the accredited agency, approved person, 
and accrediting entity following adverse action by the accrediting 
entity.
96.78 Accrediting entity procedures to terminate adverse action.
96.79 Administrative or judicial review of adverse action by the 
accrediting entity.
96.80 [Reserved].
Subpart L--Oversight of Accredited Agencies and Approved Persons by the 
Secretary
96.81 Scope.
96.82 The Secretary's response to actions by the accrediting entity.
96.83 Suspension or cancellation of accreditation or approval by the 
Secretary.
96.84 Reinstatement of accreditation or approval after suspension or 
cancellation by the Secretary.
96.85 Temporary and permanent debarment by the Secretary.
96.86 Length of debarment period and reapplication after temporary 
debarment.
96.87 Responsibilities of the accredited agency, approved person, 
and accrediting entity following suspension, cancellation, or 
debarment by the Secretary.
96.88 Review of suspension, cancellation, or debarment by the 
Secretary.
96.89 [Reserved].
Subpart M--Dissemination and Reporting of Information by Accrediting 
Entities
96.90 Scope.
96.91 Dissemination of information to the public about accreditation 
and approval status.
96.92 Dissemination of information to the public about complaints 
against accredited agencies and approved persons.
96.93 Reports to the Secretary about accredited agencies and 
approved persons and their activities.
96.94 [Reserved].
Subpart N--Procedures and Standards Relating to Temporary Accreditation
96.95 Scope.
96.96 Eligibility requirements for temporary accreditation.
96.97 Application procedures for temporary accreditation.
96.98 Length of temporary accreditation period.
96.99 Converting an application for temporary accreditation to an 
application for full accreditation.
96.100 Procedures for evaluating applicants for temporary 
accreditation.
96.101 Notification of temporary accreditation decisions.
96.102 Review of temporary accreditation decisions.
96.103 Oversight by accrediting entities.
96.104 Performance standards for temporary accreditation.
96.105 Adverse action against a temporarily accredited agency by an 
accrediting entity.
96.106 Review of the withdrawal of temporary accreditation by an 
accrediting entity.
96.107 Adverse action against a temporarily accredited agency by the 
Secretary.
96.108 Review of the withdrawal of temporary accreditation by the 
Secretary.
96.109 Effect of the withdrawal of temporary accreditation by the 
accrediting entity or the Secretary.
96.110 Dissemination and reporting of information about temporarily 
accredited agencies.
96.111 Fees charged for temporary accreditation.

    Authority: The Convention on Protection of Children and Co-
operation in Respect of

[[Page 8133]]

Intercountry Adoption (done at the Hague, May 29, 1993), S. Treaty 
Doc. 105-51 (1998), 1870 U.N.T.S. 167 (Reg. No. 31922 (1993)); The 
Intercountry Adoption Act of 2000, 42 U.S.C. 14901-14954.

Subpart A--General Provisions


Sec.  96.1  Purpose.

    This part provides for the accreditation and approval of agencies 
and persons pursuant to the Intercountry Adoption Act of 2000 (Pub. L. 
106-279, 42 U.S.C. 14901-14954). Subpart B of this part establishes the 
procedures for the selection and designation of accrediting entities to 
perform the accreditation and approval functions. Subparts C through H 
establish the general procedures and standards for accreditation and 
approval of agencies and persons (including renewal of accreditation or 
approval). Subparts I through M address the oversight of accredited or 
approved agencies and persons. Subpart N establishes special rules 
relating to small agencies that wish to seek temporary accreditation.


Sec.  96.2  Definitions.

    As used in this part, the term:
    Accredited agency means an agency that has been accredited by an 
accrediting entity, in accordance with the standards in subpart F of 
this part, to provide adoption services in the United States in cases 
subject to the Convention. It does not include a temporarily accredited 
agency.
    Accrediting entity means an entity that has been designated by the 
Secretary to accredit agencies (including temporarily accredit) and/or 
to approve persons for purposes of providing adoption services in the 
United States in cases subject to the Convention.
    Adoption means the judicial or administrative act that establishes 
a permanent legal parent-child relationship between a minor and an 
adult who is not already the minor's legal parent and terminates the 
legal parent-child relationship between the adoptive child and any 
former parent(s).
    Adoption record means any record, information, or item related to a 
specific Convention adoption of a child received or maintained by an 
agency, person, or public domestic authority, including, but not 
limited to, photographs, videos, correspondence, personal effects, 
medical and social information, and any other information about the 
child. An adoption record does not include a record generated by an 
agency, person, or a public domestic authority to comply with the 
requirement to file information with the Case Registry on adoptions not 
subject to the Convention pursuant to section 303(d) of the IAA (42 
U.S.C. 14932(d)).
    Adoption service means any one of the following six services:
    (1) Identifying a child for adoption and arranging an adoption;
    (2) Securing the necessary consent to termination of parental 
rights and to adoption;
    (3) Performing a background study on a child or a home study on a 
prospective adoptive parent(s), and reporting on such a study;
    (4) Making non-judicial determinations of the best interests of a 
child and the appropriateness of an adoptive placement for the child;
    (5) Monitoring a case after a child has been placed with 
prospective adoptive parent(s) until final adoption; or
    (6) When necessary because of a disruption before final adoption, 
assuming custody and providing (including facilitating the provision 
of) child care or any other social service pending an alternative 
placement.
    Agency means a private, nonprofit organization licensed to provide 
adoption services in at least one State. (For-profit entities and 
individuals that provide adoption services are considered ``persons'' 
as defined in this section.)
    Approved home study means a review of the home environment of the 
child's prospective adoptive parent(s) that has been:
    (1) Completed by an accredited agency or temporarily accredited 
agency; or
    (2) Approved by an accredited agency or temporarily accredited 
agency.
    Approved person means a person that has been approved, in 
accordance with the standards in subpart F of this part, by an 
accrediting entity to provide adoption services in the United States in 
cases subject to the Convention.
    Best interests of the child shall have the meaning given to it by 
the law of the State with jurisdiction to decide whether a particular 
adoption or adoption-related action is in a child's best interests.
    Case Registry means the tracking system jointly established by the 
Secretary and DHS to comply with section 102(e) of the IAA (42 U.S.C. 
14912).
    Central Authority means the entity designated as such under Article 
6(1) of the Convention by any Convention country or, in the case of the 
United States, the United States Department of State.
    Central Authority function means any duty required under the 
Convention to be carried out, directly or indirectly, by a Central 
Authority.
    Child welfare services means services, other than those defined as 
``adoption services'' in this section, that are designed to promote and 
protect the well-being of a family or child. Such services include, but 
are not limited to, recruiting and identifying adoptive parent(s) in 
cases of disruption (but not assuming custody of the child), arranging 
or providing temporary foster care for a child in connection with a 
Convention adoption or providing educational, social, cultural, 
medical, psychological assessment, mental health, or other health-
related services for a child or family in a Convention adoption case.
    Competent authority means a court or governmental authority of a 
foreign country that has jurisdiction and authority to make decisions 
in matters of child welfare, including adoption.
    Complaint Registry means the system created by the Secretary 
pursuant to Sec.  96.70 to receive, distribute, and monitor complaints 
relevant to the accreditation or approval status of agencies and 
persons.
    Convention means the Convention on Protection of Children and Co-
operation in Respect of Intercountry Adoption done at The Hague on May 
29, 1993.
    Convention adoption means the adoption of a child resident in a 
Convention country by a United States citizen, or an adoption of a 
child resident in the United States by an individual or individuals 
residing in a Convention country, when, in connection with the 
adoption, the child has moved or will move between the United States 
and the Convention country.
    Convention country means a country that is a party to the 
Convention and with which the Convention is in force for the United 
States.
    Country of origin means the country in which a child is a resident 
and from which a child is emigrating in connection with his or her 
adoption.
    Debarment means the loss of accreditation or approval by an agency 
or person as a result of an order of the Secretary under which the 
agency or person is temporarily or permanently barred from 
accreditation or approval.
    DHS means the Department of Homeland Security and encompasses the 
former Immigration and Naturalization Service (INS) or any successor 
entity designated by the Secretary of Homeland Security to assume the 
functions vested in the Attorney General by the IAA relating to the 
INS's responsibilities.
    Disruption means the interruption of a placement for adoption 
during the post-placement period.

[[Page 8134]]

    Dissolution means the termination of the adoptive parent(s)' 
parental rights after an adoption.
    Exempted provider means a social work professional or organization 
that performs a home study on prospective adoptive parent(s) or a child 
background study (or both) in the United States in connection with a 
Convention adoption (including any reports or updates), but that is not 
currently providing and has not previously provided any other adoption 
service in the case.
    IAA means the Intercountry Adoption Act of 2000, Public Law 106-279 
(2000) (42 U.S.C. 14901-14954), as amended from time to time.
    Legal custody means having legal responsibility for a child under 
the order of a court of law, a public domestic authority, competent 
authority, public foreign authority, or by operation of law.
    Legal services means services, other than those defined in this 
section as ``adoption services,'' that relate to the provision of legal 
advice and information and to the drafting of legal instruments. Such 
services include, but are not limited to, drawing up contracts, powers 
of attorney, and other legal instruments; providing advice and counsel 
to adoptive parent(s) on completing DHS or Central Authority forms; and 
providing advice and counsel to accredited agencies, temporarily 
accredited agencies, approved persons, or prospective adoptive 
parent(s) on how to comply with the Convention, the IAA, and the 
regulations implementing the IAA.
    Person means an individual or a private, for-profit entity 
(including a corporation, company, association, firm, partnership, 
society, or joint stock company) providing adoption services. It does 
not include public domestic authorities or public foreign authorities.
    Post-adoption means after an adoption; in cases in which an 
adoption occurs in a Convention country and is followed by a re-
adoption in the United States, it means after the adoption in the 
Convention country.
    Post-placement means after a grant of legal custody or guardianship 
of the child to the prospective adoptive parent(s), or to a custodian 
for the purpose of escorting the child to the identified prospective 
adoptive parent(s), and before an adoption.
    Primary provider means the accredited agency, temporarily 
accredited agency, or approved person that is identified pursuant to 
Sec.  96.14 as responsible for ensuring that all six adoption services 
are provided and for supervising and being responsible for supervised 
providers where used.
    Public domestic authority means an authority operated by a State, 
local, or tribal government within the United States.
    Public foreign authority means an authority operated by a national 
or subnational government of a Convention country.
    Secretary means the Secretary of State, the Assistant Secretary of 
State for Consular Affairs, or any other Department of State official 
exercising the Secretary of State's authority under the Convention, the 
IAA, or any regulations implementing the IAA, pursuant to a delegation 
of authority.
    State means the fifty States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, and the U.S. Virgin Islands.
    Supervised provider means any agency, person, or other non-
governmental entity, including any foreign entity, regardless of 
whether it is called a facilitator, agent, attorney, or by any other 
name, that is providing one or more adoption services in a Convention 
case under the supervision and responsibility of an accredited agency, 
temporarily accredited agency, or approved person that is acting as the 
primary provider in the case.
    Temporarily accredited agency means an agency that has been 
accredited on a temporary basis by an accrediting entity, in accordance 
with the standards in subpart N of this part, to provide adoption 
services in the United States in cases subject to the Convention. It 
does not include an accredited agency.


Sec.  96.3  [Reserved].

Subpart B--Selection, Designation, and Duties of Accrediting 
Entities


Sec.  96.4  Designation of accrediting entities by the Secretary.

    (a) The Secretary, in the Secretary's discretion, will designate 
one or more entities that meet the criteria set forth in Sec.  96.5 to 
perform the accreditation (including temporary accreditation) and/or 
approval functions. Each accrediting entity's designation will be set 
forth in an agreement between the Secretary and the accrediting entity. 
The agreement will govern the accrediting entity's operations. The 
agreements will be published in the Federal Register.
    (b) The Secretary's designation may authorize an accrediting entity 
to accredit (including temporarily accredit) agencies, to approve 
persons, or to both accredit agencies and approve persons. The 
designation may also limit the accrediting entity's geographic 
jurisdiction or impose other limits on the entity's jurisdiction.
    (c) A public entity may only be designated to accredit agencies and 
approve persons that are located in the public entity's State.


Sec.  96.5  Requirement that accrediting entity be a nonprofit or 
public entity.

    An accrediting entity must qualify as either:
    (a) An organization described in section 501(c)(3) of the Internal 
Revenue Code of 1986, as amended, that has expertise in developing and 
administering standards for entities providing child welfare services; 
or
    (b) A public entity (other than a Federal entity), including, but 
not limited to, any State or local government or governmental unit or 
any political subdivision, agency, or instrumentality thereof, that is 
responsible for licensing adoption agencies in a State and that has 
expertise in developing and administering standards for entities 
providing child welfare services.


Sec.  96.6  Performance criteria for designation as an accrediting 
entity.

    An entity that seeks to be designated as an accrediting entity must 
demonstrate to the Secretary:
    (a) That it has a governing structure, the human and financial 
resources, and systems of control adequate to ensure its reliability;
    (b) That it is capable of performing the accreditation or approval 
functions or both on a timely basis and of administering any renewal 
cycle authorized under Sec.  96.60;
    (c) That it can monitor the performance of agencies it has 
accredited or temporarily accredited and persons it has approved 
(including their use of any supervised providers) to ensure their 
continued compliance with the Convention, the IAA, and the regulations 
implementing the IAA;
    (d) That it has the capacity to take appropriate adverse actions 
against agencies it has accredited or temporarily accredited and 
persons it has approved;
    (e) That it can perform the required data collection, reporting, 
and other similar functions;
    (f) Except in the case of a public entity, that it operates 
independently of any agency or person that provides adoption services, 
and of any membership organization that includes agencies or persons 
that provide adoption services;
    (g) That it has the capacity to conduct its accreditation, 
temporary accreditation, and approval functions fairly and impartially;

[[Page 8135]]

    (h) That it can comply with any conflict-of-interest prohibitions 
set by the Secretary in its agreement;
    (i) That it prohibits conflicts of interest with agencies or 
persons or with any membership organization that includes agencies or 
persons that provide adoption services; and
    (j) That it prohibits its employees or other individuals acting as 
site evaluators, including, but not limited to, volunteer site 
evaluators, from becoming employees or supervised providers of an 
agency or person for at least one year after they have evaluated such 
agency or person for accreditation, temporary accreditation, or 
approval.


Sec.  96.7  Authorities and responsibilities of an accrediting entity.

    (a) An accrediting entity may be authorized by the Secretary to 
perform some or all of the following functions:
    (1) Determining whether agencies are eligible for accreditation 
and/or temporary accreditation;
    (2) Determining whether persons are eligible for approval;
    (3) Overseeing accredited agencies, temporarily accredited 
agencies, and/or approved persons by monitoring their compliance with 
applicable requirements;
    (4) Investigating and responding to complaints about accredited 
agencies, temporarily accredited agencies, and approved persons 
(including their use of supervised providers);
    (5) Taking adverse action against an accredited agency, temporarily 
accredited agency, or approved person, and/or referring an accredited 
agency, temporarily accredited agency, or approved person for possible 
action by the Secretary;
    (6) Determining whether accredited agencies and approved persons 
are eligible for renewal of their accreditation or approval on a cycle 
consistent with Sec.  96.60;
    (7) Collecting data from accredited agencies, temporarily 
accredited agencies, and approved persons, maintaining records, and 
reporting information to the Secretary, State courts, and other 
entities; and
    (8) Assisting the Secretary in taking appropriate action to help an 
agency or person in transferring its Convention cases and adoption 
records.
    (b) The Secretary may require the accrediting entity:
    (1) To utilize the Complaint Registry as provided in subpart J of 
this part; and
    (2) To fund a portion of the costs of operating the Complaint 
Registry with fees collected by the accrediting entity pursuant to the 
schedule of fees approved by the Secretary as provided in Sec.  96.8.
    (c) An accrediting entity must perform all responsibilities in 
accordance with the Convention, the IAA, the regulations implementing 
the IAA, and its agreement with the Secretary.


Sec.  96.8  Fees charged by accrediting entities.

    (a) An accrediting entity may charge fees for accreditation or 
approval services under this part only in accordance with a schedule of 
fees approved by the Secretary. Before approving a schedule of fees 
proposed by an accrediting entity, or subsequent proposed changes to an 
approved schedule, the Secretary will require the accrediting entity to 
demonstrate:
    (1) That its proposed schedule of fees reflects appropriate 
consideration of the relative size and geographic location and volume 
of Convention cases of the agencies or persons it expects to serve;
    (2) That the total fees the accrediting entity expects to collect 
under the schedule of fees will not exceed the full costs of 
accreditation or approval under this part (including, but not limited 
to, costs for completing the accreditation or approval process, 
complaint review and investigation, routine oversight and enforcement, 
and other data collection and reporting activities).
    (b) The schedule of fees must:
    (1) Establish separate non-refundable fees for Convention 
accreditation and Convention approval;
    (2) Include in each fee for full Convention accreditation or 
approval the costs of all activities associated with the accreditation 
or approval cycle, including but not limited to, costs for completing 
the accreditation or approval process, complaint review and 
investigation, routine oversight and enforcement, and other data 
collection and reporting activities, except that separate fees based on 
actual costs incurred may be charged for the travel and maintenance of 
evaluators; and
    (3) If the accrediting entity provides temporary accreditation 
services, include fees as required by Sec.  96.111 for agencies seeking 
temporary accreditation under subpart N of this part.
    (c) An accrediting entity must make its approved schedule of fees 
available to the public, including prospective applicants for 
accreditation or approval, upon request. At the time of application, 
the accrediting entity must specify the fees to be charged to the 
applicant in a contract between the parties and must provide notice to 
the applicant that no portion of the fee will be refunded if the 
applicant fails to become accredited or approved.
    (d) Nothing in this section shall be construed to provide a private 
right of action to challenge any fee charged by an accrediting entity 
pursuant to a schedule of fees approved by the Secretary.


Sec.  96.9  Agreement between the Secretary and the accrediting entity.

    An accrediting entity must perform its functions pursuant to a 
written agreement with the Secretary that will be published in the 
Federal Register. The agreement will address:
    (a) The responsibilities and duties of the accrediting entity;
    (b) The method by which the costs of delivering the accreditation, 
temporary accreditation, or approval services may be recovered through 
the collection of fees from those seeking accreditation, temporary 
accreditation, or approval, and how the entity's schedule of fees will 
be approved;
    (c) How the accrediting entity will address complaints about 
accredited agencies, temporarily accredited agencies, and approved 
persons (including their use of supervised providers) and complaints 
about the accrediting entity itself;
    (d) Data collection requirements;
    (e) Matters of communication and accountability between both the 
accrediting entity and the applicant(s) and between the accrediting 
entity and the Secretary; and
    (f) Other matters upon which the parties have agreed.


Sec.  96.10  Suspension or cancellation of the designation of an 
accrediting entity by the Secretary.

    (a) The Secretary will suspend or cancel the designation of an 
accrediting entity if the Secretary concludes that it is substantially 
out of compliance with the Convention, the IAA, the regulations 
implementing the IAA, other applicable laws, or the agreement with the 
Secretary. Complaints regarding the performance of the accrediting 
entity may be submitted to the Department of State, Bureau of Consular 
Affairs. The Secretary will consider complaints in determining whether 
an accrediting entity's designation should be suspended or canceled.
    (b) The Secretary will notify an accrediting entity in writing of 
any deficiencies in the accrediting entity's performance that could 
lead to the suspension or cancellation of its designation, and will 
provide the accrediting entity with an opportunity to demonstrate that 
suspension or cancellation is unwarranted, in accordance with 
procedures established in the agreement entered into pursuant to Sec.  
96.9.

[[Page 8136]]

    (c) An accrediting entity may be considered substantially out of 
compliance under circumstances that include, but are not limited to:
    (1) Failing to act in a timely manner when presented with evidence 
that an accredited agency or approved person is substantially out of 
compliance with the standards in subpart F of this part or a 
temporarily accredited agency is substantially out of compliance with 
the standards in Sec.  96.104;
    (2) Accrediting or approving significant numbers of agencies or 
persons whose performance results in intervention of the Secretary for 
the purpose of suspension, cancellation, or debarment;
    (3) Failing to perform its responsibilities fairly and objectively;
    (4) Violating prohibitions on conflicts of interest;
    (5) Failing to meet its reporting requirements;
    (6) Failing to protect information or documents that it receives in 
the course of performing its responsibilities; and
    (7) Failing to monitor frequently and carefully the compliance of 
accredited agencies, temporarily accredited agencies, and approved 
persons with the home study requirements of the Convention, section 
203(b)(1)(A)(ii) of the IAA (42 U.S.C. 14923(b)(1)(A)(ii)), and Sec.  
96.47.
    (d) An accrediting entity that is subject to a final action of 
suspension or cancellation may petition the United States District 
Court for the District of Columbia or the United States district court 
in the judicial district in which the accrediting entity is located to 
set aside the action as provided in section 204(d) of the IAA (42 
U.S.C. 14924(d)).


Sec.  96.11  [Reserved].

Subpart C--Accreditation and Approval Requirements for the 
Provision of Adoption Services


Sec.  96.12  Authorized adoption service providers.

    (a) Once the Convention has entered into force for the United 
States, except as provided in section 505(b) of the IAA (relating to 
transitional cases), an agency or person may not offer, provide, or 
facilitate the provision of any adoption service in the United States 
in connection with a Convention adoption unless it is:
    (1) An accredited agency, a temporarily accredited agency, or an 
approved person;
    (2) A supervised provider; or
    (3) An exempted provider, if the exempted provider's home study or 
child background study will be reviewed and approved by an accredited 
agency or temporarily accredited agency pursuant to Sec.  96.47(c) or 
96.53(b).
    (b) A public domestic authority may also offer, provide, or 
facilitate the provision of any such adoption service.
    (c) Neither conferral nor maintenance of accreditation, temporary 
accreditation, or approval, nor status as an exempted or supervised 
provider, nor status as a public domestic authority shall be construed 
to imply, warrant, or establish that, in any specific case, an adoption 
service has been provided consistently with the Convention, the IAA, or 
the regulations implementing the IAA. Conferral and maintenance of 
accreditation, temporary accreditation, or approval under this part 
establishes only that the accrediting entity has concluded, in 
accordance with the standards and procedures of this part, that the 
agency or person conducts adoption services in substantial compliance 
with the applicable standards set forth in this part; it is not a 
guarantee that in any specific case the accredited agency, temporarily 
accredited agency, or approved person is providing adoption services 
consistently with the Convention, the IAA, the regulations implementing 
the IAA, or any other applicable law, whether Federal, State, or 
foreign. Neither the Secretary nor any accrediting entity shall be 
responsible for any acts of an accredited agency, temporarily 
accredited agency, approved person, exempted provider, supervised 
provider, or other entity providing services in connection with a 
Convention adoption.


Sec.  96.13  Circumstances in which accreditation, approval, or 
supervision is not required.

    (a) Home studies and child background studies. Home studies and 
child background studies, when performed by exempted providers, may be 
performed without accreditation, temporary accreditation, approval, or 
supervision; provided, however, that an exempted provider's home study 
must be approved by an accredited agency or temporarily accredited 
agency in accordance with Sec.  96.47(c), and an exempted provider's 
child background study must be approved by an accredited agency or 
temporarily accredited agency in accordance with Sec.  96.53(b).
    (b) Child welfare services. An agency or person does not need to be 
accredited, temporarily accredited, approved, or operate as a 
supervised provider if it is providing only child welfare services, and 
not providing any adoption services, in connection with a Convention 
adoption. If the agency or person provides both a child welfare service 
and any adoption service in the United States in a Convention adoption 
case, it must be accredited, temporarily accredited, or approved or 
operate as a supervised provider unless the only adoption service 
provided is preparation of a home study and/or a child background 
study.
    (c) Legal services. An agency or person does not need to be 
accredited, temporarily accredited, approved, or to operate as a 
supervised provider if it is providing only legal services, and not 
providing any adoption services, in connection with a Convention 
adoption. If the agency or person provides both a legal service and any 
adoption service in the United States in a Convention adoption case, it 
must be accredited, temporarily accredited, or approved or operate as a 
supervised provider unless the only adoption service provided is 
preparation of a home study and/or a child background study. Nothing in 
this part shall be construed:
    (1) To permit an attorney to provide both legal services and 
adoption services in an adoption case where doing so is prohibited by 
State law; or
    (2) To require any attorney who is providing one or more adoption 
services as part of his or her employment by a public domestic 
authority to be accredited or approved or operate as a supervised 
provider.
    (d) Prospective adoptive parent(s) acting on own behalf. 
Prospective adoptive parent(s) may act on their own behalf without 
being accredited, temporarily accredited, or approved unless so acting 
is prohibited by State law or the law of the Convention country. In the 
case of a child immigrating to the United States in connection with his 
or her adoption, such conduct must be permissible under the laws of the 
State in which the prospective adoptive parent(s) reside and the laws 
of the Convention country from which the parent(s) seek to adopt. In 
the case of a child emigrating from the United States in connection 
with his or her adoption, such conduct must be permissible under the 
laws of the State where the child resides and the laws of the 
Convention country in which the parent(s) reside.


Sec.  96.14  Providing adoption services using other providers.

    (a) Accreditation, temporary accreditation, and approval under this 
part require that, in each Convention adoption case, an accredited 
agency, a temporarily accredited agency, or an approved person will be 
identified and act as the primary provider. If one accredited agency, 
temporarily

[[Page 8137]]

accredited agency, or approved person is providing all adoption 
services by itself, it must act as the primary provider. If just one 
accredited agency, temporarily accredited agency, or approved person is 
involved in providing adoption services, the sole accredited agency, 
temporarily accredited agency, or approved person must act as the 
primary provider. If adoption services in the Convention case are being 
provided by more than one accredited agency, temporarily accredited 
agency, or approved person, the agency or person that has child 
placement responsibility, as evidenced by the following, must act as 
the primary provider throughout the case:
    (1) Entering into placement contracts with prospective adoptive 
parent(s) to provide child referral and placement;
    (2) Accepting custody from a birth parent or other legal custodian 
in a Convention country for the purpose of placement for adoption;
    (3) Assuming responsibility for liaison with a Convention country's 
Central Authority or its designees with regard to arranging an 
adoption; or
    (4) Receiving from or sending to a Convention country information 
about a child that is under consideration for adoption, unless acting 
as a local service provider that conveys such information to parent(s) 
on behalf of the primary provider.
    (b) Pursuant to Sec.  96.44, in the case of accredited agencies or 
approved persons, and Sec.  96.104(g), in the case of temporarily 
accredited agencies, the primary provider may only use the following to 
provide adoption services in the United States:
    (1) A supervised provider, including an accredited agency, 
temporarily accredited agency, or approved person;
    (2) An exempted provider, if the exempted provider's home study or 
child background study will be reviewed and approved by an accredited 
agency or temporarily accredited agency pursuant to Sec.  96.47(c) or 
Sec.  96.53(b); or
    (3) A public domestic authority.
    (c) Pursuant to Sec.  96.44 of subpart F, in the case of accredited 
agencies or approved persons, and Sec.  96.104(g) of subpart N, in the 
case of temporarily accredited agencies, the primary provider may only 
use the following to provide adoption services in a Convention country:
    (1) A Central Authority, competent authority, or a public foreign 
authority;
    (2) A foreign supervised provider, including a provider accredited 
by the Convention country; or
    (3) A foreign provider (agency, person, or other non-governmental 
entity) who
    (i) Has secured or is securing the necessary consent to termination 
of parental rights and to adoption, if the primary provider verifies 
consent pursuant to Sec.  96.46(c); or
    (ii) Has prepared or is preparing a background study on a child in 
a case involving immigration to the United States (incoming case) or a 
home study on prospective adoptive parent(s) in a case involving 
emigration from the United States (outgoing case), and a report on the 
results of such a study, if the primary provider verifies the study and 
report pursuant to Sec.  96.46(c).
    (d) The primary provider is not required to provide supervision or 
to assume responsibility for:
    (1) Public domestic authorities; or
    (2) Central Authorities, competent authorities, and public foreign 
authorities.
    (e) The primary provider must adhere to the standards contained in 
Sec.  96.45 (Using supervised providers in the United States) when 
using supervised providers in the United States and the applicable 
standards contained in Sec.  96.46 (Using providers in Convention 
countries) when using providers outside the United States.


Sec.  96.15  Examples.

    The following examples illustrate the rules of Sec. Sec.  96.12 to 
96.14:

    Example 1. Identifying a child for adoption and arranging an 
adoption. Agency X identifies children eligible for adoption in the 
United States on a TV program in an effort to recruit prospective 
adoptive parent(s). A couple in a Convention country calls Agency X 
about one of the children. Agency X refers them to an agency or 
person in the United States who arranges intercountry adoptions. 
Agency X does not require accreditation, temporarily accreditation, 
approval or supervision because it is not both identifying and 
arranging the adoption. In contrast, Agency Y, located in the United 
States, provides information about children eligible for adoption in 
a Convention country on a website and then arranges for interested 
U.S. parents to adopt those children. Agency Y must be accredited, 
temporarily accredited, approved, or supervised because, in addition 
to identifying children eligible for adoption, it is also helping to 
arrange the adoption.
    Example 2. Child welfare services exemption. Doctor X evaluates 
the medical records and a video of Child Y. The evaluation will be 
used in a Convention adoption as part of the placement of Child Y 
and is the only service that Doctor X provides in the United States 
with regard to Child Y's adoption. Doctor X (not employed with an 
accredited agency or approved person) does not need to be approved 
or supervised because she is not providing an adoption service as 
defined in Sec.  96.2.
    Example 3. Home study exemption. Social Worker X, in the United 
States, (not employed with an accredited agency or approved person) 
interviews Prospective Adoptive Parent Y, obtains a criminal 
background study, and checks the references of Prospective Adoptive 
Parent Y, then composes a report and submits the report to an 
accredited agency for use in a Convention adoption. Social Worker X 
does not provide any other services to Prospective Adoptive Parent 
Y. Social Worker X qualifies as an exempted provider and therefore 
need not be approved or operate as supervised provider. In contrast, 
Social Worker Z, in the United States, (not employed with an 
accredited agency or approved person) prepares a home study report 
for Prospective Adoptive Parent(s) W, and in addition re-enters the 
house after Child V has been placed with Prospective Adoptive 
Parent(s) W to assess how V and W are adjusting to life as a family. 
This assessment is post-placement monitoring, which is an adoption 
service. Therefore, Social Worker Z would need to become approved 
before providing this assessment for this Convention adoption or 
else operate as a supervised provider. If an agency or person 
provides an adoption service in addition to a home study or child 
background study, the agency or person needs to become accredited, 
temporarily accredited, approved, or supervised before providing 
that adoption service.
    Example 4. Child background study exemption. An employee of 
Agency X interviews Child Y in the United States and compiles a 
report concerning Child Y's social and developmental history for use 
in a Convention adoption. Agency X provides no other adoption 
services on behalf of Child Y. Agency X does not need to be 
accredited, temporarily accredited, approved, or supervised. Agency 
X is only conducting and creating a child background study, and 
therefore is an exempted provider. In contrast, an employee of 
Agency Z interviews Child W in the United States and creates a child 
background study for use in a Convention adoption. Agency Z 
subsequently identifies prospective adoptive parent(s) and arranges 
a new adoption when Child W's previous adoption becomes disrupted. 
Agency Z needs to be accredited, temporarily accredited, approved, 
or supervised before providing this service. If an agency or person 
provides an adoption service in addition to a child background study 
or home study, the agency or person needs to be accredited, 
temporarily accredited, approved, or supervised before providing the 
additional service.
    Example 5. Home study and child welfare services exemptions. 
Agency X interviews Prospective Adoptive Parent Y, obtains a 
criminal background check, checks the references of Prospective 
Adoptive Parent Y, then composes a home study and submits it to an 
accredited agency for use in a Convention adoption in the United 
States. Parent Y later joins a post-adoption support group for 
adoptive parents sponsored by Agency X. If Agency X performs no 
other adoption services, Agency X does not need to be accredited, 
temporarily accredited, approved, or supervised. If an agency or 
person provides a home study or child background study as well as 
other services in

[[Page 8138]]

the United States that do not require accreditation, temporary 
accreditation, approval, or supervision, and no other adoption 
services, the agency or person is an exempted provider.
    Example 6. Exempted provider. Agency X interviews Prospective 
Adoptive Parent(s) Y, obtains a criminal background check, checks 
the references of Prospective Adoptive Parent(s) Y, and then 
composes a home study and submits the report to an accredited 
agency. In addition, Agency X interviews Child Z and compiles a 
report concerning Child Z's social and developmental history. All of 
Agency X's work is done in the United States. Both reports will be 
used in a Convention adoption. If Agency X performs no other 
adoption services, Agency X does not need to be accredited, 
temporarily accredited, approved, or supervised. If an agency or 
person provides a home study and child background study as well as 
other services that do not require accreditation, temporary 
accreditation, approval or supervision, and no other adoption 
services, the agency or person is an exempted provider.
    Example 7. Legal services exemption. Attorney X (not employed 
with an accredited agency or approved person) provides advice and 
counsel to Prospective Adoptive Parent(s) Y on filling out DHS 
paperwork required for a Convention adoption. Among other papers, 
Attorney X prepares an affidavit of consent to termination of 
parental rights and to adoption of Child W to be signed by the birth 
mother in the United States. Attorney X must be approved or 
supervised because securing consent to termination of parental 
rights is an adoption service. In contrast, Attorney Z (not employed 
with an accredited agency or approved person) assists Adoptive 
Parent(s) T to complete an adoption in the State in which they 
reside, after they have been granted an adoption in Child V's 
Convention country of origin. Attorney Z is exempt from approval or 
supervision because she is providing legal services, but no adoption 
services.
    Example 8. Post-placement monitoring. A court in a Convention 
country has granted custody of Child W to Prospective Adoptive 
Parent(s) Y pending the completion of W's adoption. Agency X 
interviews both Prospective Adoptive Parent(s) Y and Child W in 
their home in the United States. Agency X gathers information on the 
adjustment of Child W as a member of the family and inquires into 
the social and educational progress of Child W. Agency X must be 
accredited, temporarily accredited, approved, or supervised. Agency 
X's activities constitute post-placement monitoring, which is an 
adoption service. In contrast, if Person Z provided counseling for 
Prospective Adoptive Parent(s) Y and/or Child W, but provided no 
adoption services in the United States to the family, Person Z would 
not need to be approved or supervised. Post-placement counseling is 
different than post-placement monitoring because it does not relate 
to evaluating the adoption placement. Post-placement counseling is 
not an adoption service and does not trigger the accreditation/
approval requirements of the IAA and this part.
    Example 9. Post-adoption services. Convention Country H requires 
that post-adoption reports be completed and sent to its Central 
Authority every year until adopted children reach the age of 18. 
Agency X provides support groups and a newsletter for U.S. parents 
that have adopted children from Country H and encourages parents to 
complete their post-adoption reports annually. Agency X does not 
need to be accredited, temporarily accredited, approved, or 
supervised because it is providing only post-adoption services. 
Post-adoption services are not included in the definition of 
adoption services, and therefore, do not trigger accreditation/
approval requirements of the IAA and this part.
    Example 10. Assuming custody and providing services after a 
disruption. Agency X provides counseling for Prospective Adoptive 
Parent(s) Y and for Child W pending the completion of Child W's 
Convention adoption. The adoption is eventually disrupted. Agency X 
helps recruit and identify new prospective adoptive parent(s) for 
Child W, but it is Agency P that assumes custody of Child W and 
places him in foster care until an alternative adoptive placement 
can be found. Agency X is not required to be accredited, temporarily 
accredited, approved, or supervised because it is not providing an 
adoption service in the United States as defined in Sec.  96.2. 
Agency P, on the other hand, is providing an adoption service and 
would have to be accredited, temporarily accredited, approved, or 
supervised.
    Example 11. Making non-judicial determinations of best interest 
of child and appropriateness of adoptive placement of child. Agency 
X receives information about and a videotape of Child W from the 
institution where Child W lives in a Convention country. Based on 
the age, sex, and health problems of Child W, Agency X matches 
Prospective Adoptive Parent(s) Y with Child W. Prospective Adoptive 
Parent(s) Y receive a referral from Agency X and agree to accept the 
referral and proceed with the adoption of Child W. Agency X 
determines that Prospective Adoptive Parent(s) Y are a good 
placement for Child W and notifies the competent authority in W's 
country of origin that it has found a match for Child W and will 
start preparing adoption paperwork. All of Agency X's services are 
provided in the United States. Agency X is performing an adoption 
service and must be accredited, temporarily accredited, approved, or 
supervised.
    Example 12. Securing necessary consent to termination of 
parental rights and to adoption. Facilitator Y is accredited by 
Convention Country Z. He has contacts at several orphanages in 
Convention Country Z and helps Agency X match children eligible for 
adoption with prospective adoptive parent(s) in the United States. 
Facilitator Y works with the institution that is the legal guardian 
of Child W in order to get the documents showing the institution's 
legal consent to the adoption of Child W. Agency X is the only U.S. 
agency providing adoption services in the case. Agency X must be 
accredited, temporarily accredited, or approved and must either 
treat Facilitator Y as a foreign supervised provider in accordance 
with Sec.  96.46(a) and (b) or verify the consents Facilitator Y 
secured, in accordance with Sec.  96.46(c).

Sec.  96.16  Public domestic authorities.

    Public domestic authorities are not required to become accredited 
to be able to provide adoption services in Convention adoption cases, 
but must comply with the Convention, the IAA, and other applicable law 
when providing services in a Convention adoption case.


Sec.  96.17  Effective date of accreditation and approval requirements.

    The Secretary will publish a document in the Federal Register 
announcing the date on which the Convention will enter into force for 
the United States. As of that date, the regulations in subpart C of 
this part will govern Convention adoptions between the United States 
and Convention countries, and agencies or persons providing adoption 
services must comply with Sec.  96.12 and applicable Federal 
regulations. The Secretary will maintain for the public a current 
listing of Convention countries.

Subpart D--Application Procedures for Accreditation and Approval


Sec.  96.18  Scope.

    (a) Agencies are eligible to apply for ``accreditation'' or 
``temporary accreditation.'' Persons are eligible to apply for 
``approval.'' Temporary accreditation is governed by the provisions in 
subpart N of this part. Unless otherwise provided in subpart N, the 
provisions of this subpart do not apply to agencies seeking temporary 
accreditation. Applications for full accreditation rather than 
temporary accreditation will be processed in accordance with Sec.  
96.20 and Sec.  96.21.
    (b) An agency or person seeking to be accredited or approved as of 
the time the Convention enters into force for the United States, and to 
be included on the initial list of accredited agencies and approved 
persons that the Secretary will deposit with the Permanent Bureau of 
the Hague Conference on Private International Law, must follow the 
special provision contained in Sec.  96.19.
    (c) If an agency or person is reapplying for accreditation or 
approval following cancellation of its accreditation or approval by an 
accrediting entity or refusal by an accrediting entity to renew its 
accreditation or approval, it must comply with the procedures in Sec.  
96.78.
    (d) If an agency or person that has been accredited or approved is 
seeking

[[Page 8139]]

renewal, it must comply with the procedures in Sec.  96.63.


Sec.  96.19  Special provision for agencies and persons seeking to be 
accredited or approved as of the time the Convention enters into force 
for the United States.

    (a) The Secretary will establish and announce, by public notice in 
the Federal Register, a transitional application deadline. An agency or 
person seeking to be accredited or approved as of the time the 
Convention enters into force for the United States must submit an 
application to an accrediting entity with jurisdiction to evaluate its 
application, with the required fee(s), by the transitional application 
deadline. The Secretary will subsequently establish and announce a date 
by which such agencies and persons must complete the accreditation or 
approval process in time to be accredited or approved at the time the 
Convention enters into force for the United States (deadline for 
initial accreditation or approval).
    (b) The accrediting entity must use its best efforts to provide a 
reasonable opportunity for an agency or person that applies by the 
transitional application deadline to complete the accreditation or 
approval process by the deadline for initial accreditation or approval. 
Only those agencies and persons that are accredited or approved by the 
deadline for initial accreditation or approval will be included on the 
initial list of accredited agencies and approved persons that the 
Secretary will deposit with the Permanent Bureau of the Hague 
Conference on Private International Law.
    (c) The accrediting entity may, in its discretion, permit an agency 
or person that fails to submit an application by the transitional 
application deadline to attempt to complete the accreditation or 
approval process in time to be included on the initial list; however, 
such an agency or person is not assured an opportunity to complete the 
accreditation or approval process in time to be included on the initial 
list. The accrediting entity must give priority to applicants that 
filed by the transitional application deadline. If such an agency or 
person succeeds in completing the accreditation or approval process in 
time to be included on the initial list, it will be treated as an 
agency or person that applied by the transitional application deadline 
for the purposes of Sec.  96.58 and Sec.  96.60(b).


Sec.  96.20  First-time application procedures for accreditation and 
approval.

    (a) Agencies or persons seeking accreditation or approval for the 
first time may submit an application at any time, with the required 
fee(s), to an accrediting entity with jurisdiction to evaluate the 
application. If an agency or person seeks to be accredited or approved 
by the deadline for initial accreditation or approval, an agency or 
person must comply with the procedures in Sec.  96.19.
    (b) The accrediting entity must establish and follow uniform 
application procedures and must make information about those procedures 
available to agencies and persons that are considering whether to apply 
for accreditation or approval. An accrediting entity must evaluate the 
applicant for accreditation or approval in a timely fashion.


Sec.  96.21  Choosing an accrediting entity.

    (a) An agency that seeks to become accredited must apply to an 
accrediting entity that is designated to provide accreditation services 
and that has jurisdiction over its application. A person that seeks to 
become approved must apply to an accrediting entity that is designated 
to provide approval services and that has jurisdiction over its 
application. The agency or person may apply to only one accrediting 
entity at a time.
    (b)(1) If the agency or person is applying for accreditation or 
approval pursuant to this part for the first time, it may apply to any 
accrediting entity with jurisdiction over its application. However, the 
agency or person must apply to the same accrediting entity that handled 
its prior application when it next applies for accreditation or 
approval, if the agency or person:
    (i) Has been denied accreditation or approval;
    (ii) Has withdrawn its application in anticipation of denial;
    (iii) Has had its accreditation or approval cancelled by an 
accrediting entity or the Secretary;
    (iv) Has been temporarily debarred by the Secretary; or
    (v) Has been refused renewal of its accreditation or approval by an 
accrediting entity.
    (2) If the prior accrediting entity is no longer providing 
accreditation or approval services, the agency or person may apply to 
any accrediting entity with jurisdiction over its application.


Sec.  96.22  [Reserved]

Subpart E--Evaluation of Applicants for Accreditation and Approval


Sec.  96.23  Scope.

    The provisions in this subpart govern the evaluation of agencies 
and persons for accreditation or approval. Temporary accreditation is 
governed by the provisions in subpart N of this part. Unless otherwise 
provided in subpart N, the provisions of this subpart do not apply to 
agencies seeking temporary accreditation.


Sec.  96.24  Procedures for evaluating applicants for accreditation or 
approval.

    (a) The accrediting entity must designate at least two evaluators 
to evaluate an agency or person for accreditation or approval. The 
accrediting entity's evaluators must have expertise in intercountry 
adoption, standards evaluation, or experience with the management or 
oversight of child welfare organizations and must also meet any 
additional qualifications required by the Secretary in the agreement 
with the accrediting entity.
    (b) To evaluate the agency's or person's eligibility for 
accreditation or approval, the accrediting entity must:
    (1) Review the agency's or person's written application and 
supporting documentation;
    (2) Verify the information provided by the agency or person by 
examining underlying documentation;
    (3) Consider any complaints received by the accrediting entity 
pursuant to subpart J of this part; and
    (4) Conduct site visit(s).
    (c) The site visit(s) may include, but need not be limited to, 
interviews with birth parents, adoptive parent(s), prospective adoptive 
parent(s), and adult adoptee(s) served by the agency or person, 
interviews with the agency's or person's employees, and interviews with 
other individuals knowledgeable about the agency's or person's 
provision of adoption services. It may also include a review of on-site 
documents. The accrediting entity must, to the extent practicable, 
advise the agency or person in advance of the type of documents it 
wishes to review during the site visit. The accrediting entity must 
require at least one of the evaluators to participate in each site 
visit. The accrediting entity must determine the number of evaluators 
that participate in a site visit in light of factors such as:
    (1) The agency's or person's size;
    (2) The number of adoption cases it handles;
    (3) The number of sites the accrediting entity decides to visit; 
and
    (4) The number of individuals working at each site.
    (d) Before deciding whether to accredit an agency or approve a 
person, the accrediting entity may, in its discretion, advise the 
agency or person of any deficiencies that may hinder or prevent its 
accreditation or approval and defer a decision to allow the agency or 
person to correct the deficiencies.

[[Page 8140]]

Sec.  96.25  Access to information and documents requested by the 
accrediting entity.

    (a) The agency or person must give the accrediting entity access to 
information and documents, including adoption case files and 
proprietary information, that it requires or requests to evaluate an 
agency or person for accreditation or approval and to perform its 
oversight, enforcement, renewal, data collection, and other functions. 
The agency or person must also cooperate with the accrediting entity by 
making employees available for interviews upon request.
    (b) Accrediting entity review of adoption case files pursuant to 
paragraph (a) shall be limited to Convention adoption case files, 
except that, in the case of first-time applicants for accreditation or 
approval, the accrediting entity may review adoption case files related 
to non-Convention cases for purposes of assessing the agency's or 
person's capacity to comply with record-keeping and data-management 
standards in subpart F of this part. The accrediting entity shall 
permit the agency or person to redact names and other information that 
identifies birth parent(s), prospective adoptive parent(s), and 
adoptee(s) from such non-Convention adoption case files prior to their 
inspection by the accrediting entity.
    (c) If an agency or person fails to provide requested documents or 
information, or to make employees available as requested, the 
accrediting entity may deny accreditation or approval or, in the case 
of an accredited agency, temporarily accredited agency, or approved 
person, take appropriate adverse action against the agency or person 
solely on that basis.


Sec.  96.26  Protection of information and documents by the accrediting 
entity.

    (a) The accrediting entity must protect from unauthorized use and 
disclosure all documents and information about the agency or person it 
receives including, but not limited to, documents and proprietary 
information about the agency's or person's finances, management, and 
professional practices received in connection with the performance of 
its accreditation or approval, oversight, enforcement, renewal, data 
collection, or other functions under its agreement with the Secretary 
and this part.
    (b) The documents and information received may not be disclosed to 
the public and may be used only for the purpose of performing the 
accrediting entity's accreditation or approval functions and related 
tasks under its agreement with Secretary and this part, or to provide 
information to the Secretary, the Complaint Registry, or an appropriate 
Federal, State, or local authority, including, but not limited to, a 
public domestic authority or local law enforcement authority unless:
    (1) Otherwise authorized by the agency or person in writing;
    (2) Otherwise required under Federal or State laws; or
    (3) Required pursuant to subpart M of this part.
    (c) Unless the names and other information that identifies the 
birth parent(s), prospective adoptive parent(s), and adoptee(s) are 
requested by the accrediting entity for an articulated reason, the 
agency or person may withhold from the accrediting entity such 
information and substitute individually assigned codes in the documents 
it provides. The accrediting entity must have appropriate safeguards to 
protect from unauthorized use and disclosure of any information in its 
files that identifies birth parent(s), prospective adoptive parent(s), 
and adoptee(s). The accrediting entity must ensure that its officers, 
employees, contractors, and evaluators who have access to information 
or documents provided by the agency or person have signed a non-
disclosure agreement reflecting the requirements of Sec.  96.26(a) and 
(b). The accrediting entity must maintain an accurate record of the 
agency's or person's application, the supporting documentation, and the 
basis for its decision.


Sec.  96.27  Substantive criteria for evaluating applicants for 
accreditation or approval.

    (a) The accrediting entity may not grant an agency accreditation or 
a person approval, or permit an agency's or person's accreditation or 
approval to be maintained, unless the agency or person demonstrates to 
the satisfaction of the accrediting entity that it is in substantial 
compliance with the standards in subpart F of this part.
    (b) When the agency or person makes its initial application for 
accreditation or approval under the standards contained in subpart F of 
this part, the accrediting entity may measure the capacity of the 
agency or person to achieve substantial compliance with these standards 
where relevant evidence of its actual performance is not yet available. 
Once the agency or person has been accredited or approved pursuant to 
this part, the accrediting entity must, for the purposes of monitoring, 
renewal, enforcement, and reapplication after adverse action, consider 
the agency's or person's actual performance in deciding whether the 
agency or person is in substantial compliance with the standards 
contained in subpart F of this part, unless the accrediting entity 
determines that it is still necessary to measure capacity because 
adequate evidence of actual performance is not available.
    (c) The standards contained in subpart F of this part apply during 
all the stages of accreditation and approval, including, but not 
limited to, when the accrediting entity is evaluating an applicant for 
accreditation or approval, when it is determining whether to renew an 
agency's or person's accreditation or approval, when it is monitoring 
the performance of an accredited agency or approved person, and when it 
is taking adverse action against an accredited agency or approved 
person. Except as provided in Sec.  96.25 and paragraphs (e) and (f) of 
this section, the accrediting entity may only use the standards 
contained in subpart F of this part when determining whether an agency 
or person may be granted or permitted to maintain Convention 
accreditation or approval.
    (d) The Secretary will ensure that each accrediting entity performs 
its accreditation and approval functions using only a method approved 
by the Secretary that is substantially the same as the method approved 
for use by each other accrediting entity. Each such method will 
include: an assigned value for each standard (or element of a 
standard); a method of rating an agency's or person's compliance with 
each applicable standard; and a method of evaluating whether an 
agency's or person's overall compliance with all applicable standards 
establishes that the agency or person is in substantial compliance with 
the standards and can be accredited, temporarily accredited, or 
approved. The Secretary will ensure that the value assigned to each 
standard reflects the relative importance of that standard to 
compliance with the Convention and the IAA and is consistent with the 
value assigned to the standard by other accrediting entities. The 
accrediting entity must advise applicants of the value assigned to each 
standard (or elements of each standard) at the time it provides 
applicants with the application materials.
    (e) If an agency or person has previously been denied accreditation 
or approval, has withdrawn its application in anticipation of denial, 
has had its temporary accreditation withdrawn, or is reapplying for 
accreditation or approval after cancellation, refusal to renew, or 
temporary debarment, the accrediting entity may take the reasons 
underlying such actions into account when evaluating the agency or 
person

[[Page 8141]]

for accreditation or approval, and may deny accreditation or approval 
on the basis of the previous action.
    (f) If an agency or person that has an ownership or control 
interest in the applicant, as that term is defined in section 1124 of 
the Social Security Act (42 U.S.C. 1320a-3), has been debarred pursuant 
to Sec.  96.85, the accrediting entity may take into account the 
reasons underlying the debarment when evaluating the agency or person 
for accreditation or approval, and may deny accreditation or approval 
or refuse to renew accreditation or approval on the basis of the 
debarment.
    (g) The standards contained in subpart F of this part do not 
eliminate the need for an agency or person to comply fully with the 
laws of the jurisdictions in which it operates. An agency or person 
must provide adoption services in Convention cases consistent with the 
laws of any State in which it operates and with the Convention and the 
IAA. Persons that are approved to provide adoption services may only 
provide such services in States that do not prohibit persons from 
providing adoption services. Nothing in the application of subparts E 
and F should be construed to require a State to allow persons to 
provide adoption services if State law does not permit them to do so.


Sec.  96.28  [Reserved]

Subpart F--Standards for Convention Accreditation and Approval


Sec.  96.29  Scope.

    The provisions in this subpart provide the standards for 
accrediting agencies and approving persons. Temporary accreditation is 
governed by the provisions in subpart N of this part. Unless otherwise 
provided in subpart N of this part, the provisions in this subpart do 
not apply to agencies seeking temporary accreditation.

Licensing and Corporate Governance


Sec.  96.30  State licensing.

    (a) The agency or person is properly licensed or otherwise 
authorized by State law to provide adoption services in at least one 
State.
    (b) The agency or person follows applicable State licensing and 
regulatory requirements in all jurisdictions in which it provides 
adoption services.
    (c) If it provides adoption services in a State in which it is not 
itself licensed or authorized to provide such services, the agency or 
person does so only:
    (1) Through agencies or persons that are licensed or authorized by 
State law to provide adoption services in that State and that are 
exempted providers or acting as supervised providers; or
    (2) Through public domestic authorities.
    (d) In the case of a person, the individual or for-profit entity is 
not prohibited by State law from providing adoption services in any 
State where it is providing adoption services, and does not provide 
adoption services in Convention countries that prohibit individuals or 
for-profit entities from providing adoption services.


Sec.  96.31  Corporate structure.

    (a) The agency qualifies for nonprofit tax treatment under section 
501(c)(3) of the Internal Revenue Code of 1986, as amended, or for 
nonprofit status under the laws of any State.
    (b) The person is an individual or is a for-profit entity organized 
as a corporation, company, association, firm, partnership, society, or 
joint stock company, or other legal entity under the laws of any State.


Sec.  96.32  Internal structure and oversight.

    (a) The agency or person has (or, in the case of an individual, is) 
a chief executive officer or equivalent official who is qualified by 
education, adoption service experience, and management credentials to 
ensure effective use of resources and coordinated delivery of the 
services provided by the agency or person, and has authority and 
responsibility for management and oversight of the staff and any 
supervised providers in carrying out the adoption-related functions of 
the organization.
    (b) The agency or person has a board of directors or a similar 
governing body that establishes and approves its mission, policies, 
budget, and programs; provides leadership to secure the resources 
needed to support its programs; includes one or more individuals with 
experience in adoption, including but not limited to, adoptees, birth 
parents, prospective adoptive parent(s), and adoptive parents; and 
appoints and oversees the performance of its chief executive officer or 
equivalent official. This standard does not apply where the person is 
an individual practitioner.
    (c) The agency or person keeps permanent records of the meetings 
and deliberations of its governing body and of its major decisions 
affecting the delivery of adoption services.
    (d) The agency or person has in place procedures and standards, 
pursuant to Sec.  96.45 and Sec.  96.46, for the selection, monitoring, 
and oversight of supervised providers.
    (e) The agency or person discloses to the accrediting entity the 
following information:
    (1) Any other names by which the agency or person is or has been 
known, under either its current or any former form of organization, and 
the addresses and phone numbers used when such names were used;
    (2) The name, address, and phone number of each current director, 
manager, and employee of the agency or person, and, for any such 
individual who previously served as a director, manager, or employee of 
another provider of adoption services, the name, address, and phone 
number of such other provider; and
    (3) The name, address, and phone number of any entity it uses or 
intends to use as a supervised provider.

Financial and Risk Management


Sec.  96.33  Budget, audit, insurance, and risk assessment 
requirements.

    (a) The agency or person operates under a budget approved by its 
governing body, if applicable, for management of its funds. The budget 
discloses all remuneration (including perquisites) paid to the agency's 
or person's board of directors, managers, employees, and supervised 
providers.
    (b) The agency's or person's finances are subject to annual 
internal review and oversight and are subject to independent audits 
every four years. The agency or person submits copies of internal 
financial review reports for inspection by the accrediting entity each 
year.
    (c) The agency or person submits copies of each audit, as well as 
any accompanying management letter or qualified opinion letter, for 
inspection by the accrediting entity.
    (d) The agency or person meets the financial reporting requirements 
of Federal and State laws and regulations.
    (e) The agency's or person's balance sheets show that it operates 
on a sound financial basis and maintains on average sufficient cash 
reserves, assets, or other financial resources to meet its operating 
expenses for two months, taking into account its projected volume of 
cases and its size, scope, and financial commitments. The agency or 
person has a plan to transfer its Convention cases if it ceases to 
provide or is no longer permitted to provide adoption services in 
Convention cases. The plan includes provisions for an organized closure 
and reimbursement to clients of funds paid for services not yet 
rendered.
    (f) If it accepts charitable donations, the agency or person has 
safeguards in place to ensure that such donations do

[[Page 8142]]

not influence child placement decisions in any way.
    (g) The agency or person assesses the risks it assumes, including 
by reviewing information on the availability of insurance coverage for 
Convention-related activities. The agency or person uses the assessment 
to meet the requirements in paragraph (h) of this section and as the 
basis for determining the type and amount of professional, general, 
directors' and officers', errors and omissions, and other liability 
insurance to carry.
    (h) The agency or person maintains professional liability insurance 
in amounts reasonably related to its exposure to risk, but in no case 
in an amount less than $1,000,000 in the aggregate.
    (i) The agency's or person's chief executive officer, chief 
financial officer, and other officers or employees with direct 
responsibility for financial transactions or financial management of 
the agency or person are bonded.


Sec.  96.34  Compensation.

    (a) The agency or person does not compensate any individual who 
provides intercountry adoption services with an incentive fee or 
contingent fee for each child located or placed for adoption.
    (b) The agency or person compensates its directors, officers, 
employees, and supervised providers who provide intercountry adoption 
services only for services actually rendered and only on a fee-for-
service, hourly wage, or salary basis rather than a contingent fee 
basis.
    (c) The agency or person does not make any payments, promise 
payment, or give other consideration to any individual directly or 
indirectly involved in provision of adoption services in a particular 
case, except for salaries or fees for services actually rendered and 
reimbursement for costs incurred. This does not prohibit an agency or 
person from providing in-kind or other donations not intended to 
influence or affect a particular adoption.
    (d) The fees, wages, or salaries paid to the directors, officers, 
employees, and supervised providers of the agency or person are not 
unreasonably high in relation to the services actually rendered, taking 
into account the country in which the adoption services are provided 
and norms for compensation within the intercountry adoption community 
in that country, to the extent that such norms are known to the 
accrediting entity; the location, number, and qualifications of staff; 
workload requirements; budget; and size of the agency or person.
    (e) Any other compensation paid to the agency's or person's 
directors or members of its governing body is not unreasonably high in 
relation to the services rendered, taking into account the same factors 
listed in paragraph (d) of this section and its for-profit or nonprofit 
status.
    (f) The agency or person identifies all vendors to whom clients are 
referred for non-adoption services and discloses to the accrediting 
entity any corporate or financial arrangements and any family 
relationships with such vendors.

Ethical Practices and Responsibilities


Sec.  96.35  Suitability of agencies and persons to provide adoption 
services consistent with the Convention.

    (a) The agency or person provides adoption services ethically and 
in accordance with the Convention's principles of:
    (1) Ensuring that intercountry adoptions take place in the best 
interests of children; and
    (2) Preventing the abduction, exploitation, sale, or trafficking of 
children.
    (b) In order to permit the accrediting entity to evaluate the 
suitability of an agency or person for accreditation or approval, the 
agency or person discloses to the accrediting entity the following 
information related to the agency or person, under its current or any 
former name:
    (1) Any instances in which the agency or person has lost the right 
to provide adoption services in any State or country, including the 
basis for such action(s);
    (2) Any instances in which the agency or person was debarred or 
otherwise denied the authority to provide adoption services in any 
State or country, including the basis and disposition of such 
action(s);
    (3) Any licensing suspensions for cause or other negative sanctions 
by oversight bodies against the agency or person, including the basis 
and disposition of such action(s);
    (4) For the prior ten-year period, any disciplinary action(s) 
against the agency or person by a licensing or accrediting body, 
including the basis and disposition of such action(s);
    (5) For the prior ten-year period, any written complaint(s) related 
to the provision of adoption-related services, including the basis and 
disposition of such complaints, against the agency or person filed with 
any State or Federal or foreign regulatory body and of which the agency 
or person was notified;
    (6) For the prior ten-year period, any known past or pending 
investigation(s) (by Federal authorities or by public domestic 
authorities), criminal charge(s), child abuse charge(s), or lawsuit(s) 
against the agency or person, related to the provision of child welfare 
or adoption-related services, and the basis and disposition of such 
action(s).
    (7) Any instances where the agency or person has been found guilty 
of any crime under Federal, State, or foreign law or has been found to 
have committed any civil or administrative violation involving 
financial irregularities under Federal, State, or foreign law;
    (8) For the prior five-year period, any instances where the agency 
or person has filed for bankruptcy; and
    (9) Descriptions of any businesses or activities that are 
inconsistent with the principles of the Convention and that have been 
or are currently carried out by the agency or person, affiliate 
organizations, or by any organization in which the agency or person has 
an ownership or controlling interest.
    (c) In order to permit the accrediting entity to evaluate the 
suitability of an agency or person for accreditation or approval, the 
agency or person (for its current or any former names) discloses to the 
accrediting entity the following information about its individual 
directors, officers, and employees:
    (1) For the prior ten-year period, any conduct by any such 
individual related to the provision of adoption-related services that 
was subject to external disciplinary proceeding(s);
    (2) Any convictions or current investigations of any such 
individual who is in a senior management position for acts involving 
financial irregularities;
    (3) The results of a State criminal background check and a child 
abuse clearance for any such individual in the United States in a 
senior management position or who works directly with parent(s) and/or 
children (unless such checks have been included in the State licensing 
process); and
    (4) A completed FBI Form FD-258 for each such individual in the 
United States in a senior management position or who works directly 
with parent(s) and/or children, which the agency or person must keep on 
file in case future allegations warrant submission of the form for a 
Federal criminal background check of any such individual.
    (5) Descriptions of any businesses or activities that are 
inconsistent with the principles of the Convention and that are known 
to have been or are currently carried out by current individual 
directors, officers, or employees of the agency or person.
    (d) In order to permit the accrediting entity to evaluate the 
suitability of a

[[Page 8143]]

person who is an individual practitioner for approval, the individual:
    (1) Provides the results of a State criminal background check and a 
child abuse clearance to the accrediting entity;
    (2) Completes and retains a FBI Form FD-258 on file in case future 
allegations warrant submission of the form for a Federal criminal 
background check;
    (3) If a lawyer, for every jurisdiction in which he or she has ever 
been admitted to the Bar, provides a certificate of good standing or an 
explanation of why he or she is not in good standing, accompanied by 
any relevant documentation and immediately reports to the accrediting 
entity any disciplinary action considered by a State bar association, 
regardless of whether the action relates to intercountry adoption; and
    (4) If a social worker, for every jurisdiction in which he or she 
has been licensed, provides a certificate of good standing or an 
explanation of why he or she is not in good standing, accompanied by 
any relevant documentation.
    (e) In order to permit the accrediting entity to monitor the 
suitability of an agency or person, the agency or person must disclose 
any changes in the information required by Sec.  96.35 within thirty 
business days of learning of the change.


Sec.  96.36  Prohibition on child buying.

    (a) The agency or person prohibits its employees and agents from 
giving money or other consideration, directly or indirectly, to a 
child's parent(s), other individual(s), or an entity as payment for the 
child or as an inducement to release the child. If permitted or 
required by the child's country of origin, an agency or person may 
remit reasonable payments for activities related to the adoption 
proceedings, pre-birth and birth medical costs, the care of the child, 
the care of the birth mother while pregnant and immediately following 
birth of the child, or the provision of child welfare and child 
protection services generally. Permitted or required contributions 
shall not be remitted as payment for the child or as an inducement to 
release the child.
    (b) The agency or person has written policies and procedures in 
place reflecting the prohibitions in paragraph (a) of this section and 
reinforces them in its employee training programs.

Professional Qualifications and Training for Employees


Sec.  96.37  Education and experience requirements for social service 
personnel.

    (a) The agency or person only uses employees with appropriate 
qualifications and credentials to perform, in connection with a 
Convention adoption, adoption-related social service functions that 
require the application of clinical skills and judgment (home studies, 
child background studies, counseling, parent preparation, post-
placement, and other similar services).
    (b) The agency's or person's employees meet any State licensing or 
regulatory requirements for the services they are providing.
    (c) The agency's or person's executive director, the supervisor 
overseeing a case, or the social service employee providing adoption-
related social services that require the application of clinical skills 
and judgment (home studies, child background studies, counseling, 
parent preparation, post-placement, and other similar services) has 
experience in the professional delivery of intercountry adoption 
services.
    (d) Supervisors. The agency's or person's social work supervisors 
have prior experience in family and children's services, adoption, or 
intercountry adoption and either:
    (1) A master's degree from an accredited program of social work;
    (2) A master's degree (or doctorate) in a related human service 
field, including, but not limited to, psychology, psychiatry, 
psychiatric nursing, counseling, rehabilitation counseling, or pastoral 
counseling; or
    (3) In the case of a social work supervisor who is or was an 
incumbent at the time the Convention enters into force for the United 
States, the supervisor has significant skills and experience in 
intercountry adoption and has regular access for consultation purposes 
to an individual with the qualifications listed in paragraph (d)(1) or 
paragraph (d)(2) of this section.
    (e) Non-supervisory employees. The agency's or person's non-
supervisory employees providing adoption-related social services that 
require the application of clinical skills and judgment other than home 
studies or child background studies have either:
    (1) A master's degree from an accredited program of social work or 
in another human service field; or
    (2) A bachelor's degree from an accredited program of social work; 
or a combination of a bachelor's degree in any field and prior 
experience in family and children's services, adoption, or intercountry 
adoption; and
    (3) Are supervised by an employee of the agency or person who meets 
the requirements for supervisors in paragraph (d) of this section.
    (f) Home studies. The agency's or person's employees who conduct 
home studies:
    (1) Are authorized or licensed to complete a home study under the 
laws of the States in which they practice;
    (2) Meet the INA requirements for home study preparers in 8 CFR 
204.3(b); and
    (3) Are supervised by an employee of the agency or person who meets 
the requirements in paragraph (d) of this section.
    (g) Child background studies. The agency's or person's employees 
who prepare child background studies:
    (1) Are authorized or licensed to complete a child background study 
under the laws of the States in which they practice; and
    (2) Are supervised by an employee of the agency or person who meets 
the requirements in paragraph (d) of this section.


Sec.  96.38  Training requirements for social service personnel.

    (a) The agency or person provides newly hired employees who have 
adoption-related responsibilities involving the application of clinical 
skills and judgment (home studies, child background studies, counseling 
services, parent preparation, post-placement and other similar 
services) with a comprehensive orientation to intercountry adoption 
that includes training on:
    (1) The requirements of the Convention, the IAA, the regulations 
implementing the IAA, and other applicable Federal regulations;
    (2) The INA regulations applicable to the immigration of children 
adopted from a Convention country;
    (3) The adoption laws of any Convention country where the agency or 
person provides adoption services;
    (4) Relevant State laws;
    (5) Ethical considerations in intercountry adoption and 
prohibitions on child-buying;
    (6) The agency's or person's goals, ethical and professional 
guidelines, organizational lines of accountability, policies, and 
procedures; and
    (7) The cultural diversity of the population(s) served by the 
agency or person.
    (b) In addition to the orientation training required under 
paragraph (a) of this section, the agency or person provides initial 
training to newly hired

[[Page 8144]]

or current employees whose responsibilities include providing adoption-
related social services that involve the application of clinical skills 
and judgment (home studies, child background studies, counseling 
services, parent preparation, post-placement and other similar 
services) that addresses:
    (1) The factors in the countries of origin that lead to children 
needing adoptive families;
    (2) Feelings of separation, grief, and loss experienced by the 
child with respect to the family of origin;
    (3) Attachment and post-traumatic stress disorders;
    (4) Psychological issues facing children who have experienced abuse 
or neglect and/or whose parents' rights have been terminated because of 
abuse or neglect;
    (5) The impact of institutionalization on child development;
    (6) Outcomes for children placed for adoption internationally and 
the benefits of permanent family placements over other forms of 
government care;
    (7) The most frequent medical and psychological problems 
experienced by children from the countries of origin served by the 
agency or person;
    (8) The process of developing emotional ties to an adoptive family;
    (9) Acculturation and assimilation issues, including those arising 
from factors such as race, ethnicity, religion, and culture and the 
impact of having been adopted internationally; and
    (10) Child, adolescent, and adult development as affected by 
adoption.
    (c) The agency or person ensures that employees who provide 
adoption-related social services that involve the application of 
clinical skills and judgment (home studies, child background studies, 
counseling services, parent preparation, post-placement and other 
similar services) also receive, in addition to the orientation and 
initial training described in paragraphs (a) and (b) of this section, 
no less than thirty hours of training every two years, or more if 
required by State law, on current and emerging adoption practice issues 
through participation in seminars, conferences, documented distance 
learning courses, and other similar programs. Continuing education 
hours required under State law may count toward the thirty hours of 
training as long as the training is related to current and emerging 
adoption practice issues.
    (d) The agency or person exempts newly hired and current employees 
from elements of the orientation and initial training required in 
paragraphs (a) and (b) of this section only where the employee has 
demonstrated experience with intercountry adoption and knowledge of the 
Convention and the IAA.

Information Disclosure, Fee Practices, and Quality Control Policies and 
Practices


Sec.  96.39  Information disclosure and quality control practices.

    (a) The agency or person fully discloses in writing to the general 
public upon request and to prospective client(s) upon initial contact:
    (1) Its adoption service policies and practices, including general 
eligibility criteria and fees;
    (2) The supervised providers with whom the prospective client(s) 
can expect to work in the United States and in the child's country of 
origin and the usual costs associated with their services; and
    (3) A sample written adoption services contract substantially like 
the one that the prospective client(s) will be expected to sign should 
they proceed.
    (b) The agency or person discloses to client(s) and prospective 
client(s) that the following information is available upon request and 
makes such information available when requested:
    (1) The number of its adoption placements per year for the prior 
three calendar years, and the number and percentage of those placements 
that remain intact, are disrupted, or have been dissolved as of the 
time the information is provided;
    (2) The number of parents who apply to adopt on a yearly basis, 
based on data for the prior three calendar years; and
    (3) The number of children eligible for adoption and awaiting an 
adoptive placement referral via the agency or person.
    (c) The agency or person does not give preferential treatment to 
its board members, contributors, volunteers, employees, agents, 
consultants, or independent contractors with respect to the placement 
of children for adoption and has a written policy to this effect.
    (d) The agency or person requires a client to sign a waiver of 
liability as part of the adoption service contract only where that 
waiver complies with applicable State law. Any waiver required is 
limited and specific, based on risks that have been discussed and 
explained to the client in the adoption services contract.
    (e) The agency or person cooperates with reviews, inspections, and 
audits by the accrediting entity or the Secretary.
    (f) The agency or person uses the internet in the placement of 
individual children eligible for adoption only where:
    (1) Such use is not prohibited by applicable State or Federal law 
or by the laws of the child's country of origin;
    (2) Such use is subject to controls to avoid misuse and links to 
any sites that reflect practices that involve the sale, abduction, 
exploitation, or trafficking of children;
    (3) Such use, if it includes photographs, is designed to identify 
children either who are currently waiting for adoption or who have 
already been adopted or placed for adoption (and who are clearly so 
identified); and
    (4) Such use does not serve as a substitute for the direct 
provision of adoption services, including services to the child, the 
prospective adoptive parent(s), and/or the birth parent(s).


Sec.  96.40  Fee policies and procedures.

    (a) The agency or person provides to all applicants, prior to 
application, a written schedule of expected total fees and estimated 
expenses and an explanation of the conditions under which fees or 
expenses may be charged, waived, reduced, or refunded and of when and 
how the fees and expenses must be paid.
    (b) Before providing any adoption service to prospective adoptive 
parent(s), the agency or person itemizes and discloses in writing the 
following information for each separate category of fees and estimated 
expenses that the prospective adoptive parent(s) will be charged in 
connection with a Convention adoption:
    (1) Home study. The expected total fees and estimated expenses for 
home study preparation and approval, whether the home study is to be 
prepared directly by the agency or person itself, or prepared by a 
supervised provider, exempted provider, or approved person and approved 
as required under Sec.  96.47;
    (2) Adoption expenses in the United States. The expected total fees 
and estimated expenses for all adoption services other than the home 
study that will be provided in the United States. This category 
includes, but is not limited to, personnel costs, administrative 
overhead, operational costs, training and education, communications and 
publications costs, and any other costs related to providing adoption 
services in the United States;
    (3) Foreign country program expenses. The expected total fees and 
estimated expenses for all adoption services that will be provided in 
the child's Convention country. This category includes, but is not 
limited to, costs for

[[Page 8145]]

personnel, administrative overhead, training, education, legal 
services, and communications, and any other costs related to providing 
adoption services in the child's Convention country;
    (4) Care of the child. The expected total fees and estimated 
expenses charged to prospective adoptive parent(s) for the care of the 
child in the country of origin prior to adoption, including, but not 
limited to, costs for food, clothing, shelter and medical care; foster 
care services; orphanage care; and any other services provided directly 
to the child;
    (5) Translation and document expenses. The expected total fees and 
estimated expenses for obtaining any necessary documents and for any 
translation of documents related to the adoption, along with 
information on whether the prospective adoptive parent(s) will be 
expected to pay such costs directly or to third parties, either in the 
United States or in the child's Convention country, or through the 
agency or person. This category includes, but is not limited to, costs 
for obtaining, translating, or copying records or documents required to 
complete the adoption, costs for the child's Convention court 
documents, passport, adoption certificate and other documents related 
to the adoption, and costs for notarizations and certifications;
    (6) Contributions. Any fixed contribution amount or percentage that 
the prospective adoptive parent(s) will be expected or required to make 
to child protection or child welfare service programs in the child's 
Convention country or in the United States, along with an explanation 
of the intended use of the contribution and the manner in which the 
transaction will be recorded and accounted for; and
    (7) Post-placement and post-adoption reports. The expected total 
fees and estimated expenses for any post-placement or post-adoption 
reports that the agency or person or parent(s) must prepare in light of 
any requirements of the expected country of origin.
    (c) If the following fees and estimated expenses were not disclosed 
as part of the categories identified in paragraph (b) of this section, 
the agency or person itemizes and discloses in writing any:
    (1) Third party fees. The expected total fees and estimated 
expenses for services that the prospective adoptive parent(s) will be 
responsible to pay directly to a third party. Such third party fees 
include, but are not limited to, fees to competent authorities for 
services rendered or Central Authority processing fees; and
    (2) Travel and accommodation expenses. The expected total fees and 
estimated expenses for any travel, transportation, and accommodation 
services arranged by the agency or person for the prospective adoptive 
parent(s).
    (d) The agency or person also specifies in its adoption services 
contract when and how funds advanced to cover fees or expenses will be 
refunded if adoption services are not provided.
    (e) When the agency or person uses part of its fees to provide 
special services, such as cultural programs for adoptee(s), 
scholarships or other services, it discloses this policy to the 
prospective adoptive parent(s) in advance of providing any adoption 
services and gives the prospective adoptive parent(s) a general 
description of the programs supported by such funds.
    (f) The agency or person has mechanisms in place for transferring 
funds to Convention countries when the financial institutions of the 
Convention country so permit and for obtaining written receipts for 
such transfers, so that direct cash transactions by the prospective 
adoptive parent(s) to pay for adoption services provided in the 
Convention country are minimized or unnecessary.
    (g) The agency or person does not customarily charge additional 
fees and expenses beyond those disclosed in the adoption services 
contract and has a written policy to this effect. In the event that 
unforeseen additional fees and expenses are incurred in the Convention 
country, the agency or person charges such additional fees and expenses 
only under the following conditions:
    (1) It discloses the fees and expenses in writing to the 
prospective adoptive parent(s);
    (2) It obtains the specific consent of the prospective adoptive 
parent(s) prior to expending any funds in excess of $1000 for which the 
agency or person will hold the prospective adoptive parent(s) 
responsible or gives the prospective adoptive parent(s) the opportunity 
to waive the notice and consent requirement in advance. If the 
prospective adoptive parent(s) has the opportunity to waive the notice 
and consent requirement in advance, this policy is reflected in the 
written policies and procedures of the agency or person; and
    (3) It provides written receipts to the prospective adoptive 
parent(s) for fees and expenses paid directly by the agency or person 
in the Convention country and retains copies of such receipts.
    (h) The agency or person returns any funds to which the prospective 
adoptive parent(s) may be entitled within sixty days of the completion 
of the delivery of services.

Responding to Complaints and Records and Reports Management


Sec.  96.41  Procedures for responding to complaints and improving 
service delivery.

    (a) The agency or person has written complaint policies and 
procedures that incorporate the standards in paragraphs (b) through (h) 
of this section and provides a copy of such policies and procedures, 
including contact information for the Complaint Registry, to client(s) 
at the time the adoption services contract is signed.
    (b) The agency or person permits any birth parent, prospective 
adoptive parent or adoptive parent, or adoptee to lodge directly with 
the agency or person signed and dated complaints about any of the 
services or activities of the agency or person (including its use of 
supervised providers) that he or she believes raise an issue of 
compliance with the Convention, the IAA, or the regulations 
implementing the IAA, and advises such individuals of the additional 
procedures available to them if they are dissatisfied with the agency's 
or person's response to their complaint.
    (c) The agency or person responds in writing to complaints received 
pursuant to paragraph (b) of this section within thirty days of 
receipt, and provides expedited review of such complaints that are 
time-sensitive or that involve allegations of fraud.
    (d) The agency or person maintains a written record of each 
complaint received pursuant to paragraph (b) of this section and the 
steps taken to investigate and respond to it and makes this record 
available to the accrediting entity or the Secretary upon request.
    (e) The agency or person does not take any action to discourage a 
client or prospective client from, or retaliate against a client or 
prospective client for: making a complaint; expressing a grievance; 
providing information in writing or interviews to an accrediting entity 
on the agency's or person's performance; or questioning the conduct of 
or expressing an opinion about the performance of an agency or person.
    (f) The agency or person provides to the accrediting entity and the 
Secretary, on a semi-annual basis, a summary of all complaints received 
pursuant to paragraph (b) of this section during the preceding six 
months (including the number of complaints received and how each 
complaint was resolved) and an assessment of any discernible patterns 
in complaints received against the agency or person pursuant to 
paragraph

[[Page 8146]]

(b) of this section, along with information about what systemic 
changes, if any, were made or are planned by the agency or person in 
response to such patterns.
    (g) The agency or person provides any information about complaints 
received pursuant to paragraph (b) of this section as may be requested 
by the accrediting entity or the Secretary.
    (h) The agency or person has a quality improvement program 
appropriate to its size and circumstances through which it makes 
systematic efforts to improve its adoption services as needed. The 
agency or person uses quality improvement methods such as reviewing 
complaint data, using client satisfaction surveys, or comparing the 
agency's or person's practices and performance against the data 
contained in the Secretary's annual reports to Congress on intercountry 
adoptions.


Sec.  96.42  Retention, preservation, and disclosure of adoption 
records.

    (a) The agency or person retains or archives adoption records in a 
safe, secure, and retrievable manner for the period of time required by 
applicable State law.
    (b) The agency or person makes readily available to the adoptee and 
the adoptive parent(s) upon request all non-identifying information in 
its custody about the adoptee's health history or background.
    (c) The agency or person ensures that personal data gathered or 
transmitted in connection with an adoption is used only for the 
purposes for which the information was gathered and safeguards 
sensitive individual information.
    (d) The agency or person has a plan that is consistent with the 
provisions of this section, the plan required under Sec.  96.33, and 
applicable State law for transferring custody of adoption records that 
are subject to retention or archival requirements to an appropriate 
custodian, and ensuring the accessibility of those adoption records, in 
the event that the agency or person ceases to provide or is no longer 
permitted to provide adoption services under the Convention.
    (e) The agency or person notifies the accrediting entity and the 
Secretary in writing within thirty days of the time it ceases to 
provide or is no longer permitted to provide adoption services and 
provides information about the transfer of its adoption records.


Sec.  96.43  Case tracking, data management, and reporting.

    (a) When acting as the primary provider, the agency or person 
maintains all the data required in this section in a format approved by 
the accrediting entity and provides it to the accrediting entity on an 
annual basis.
    (b) When acting as the primary provider, the agency or person 
routinely generates and maintains reports as follows:
    (1) For cases involving children immigrating to the United States, 
information and reports on the total number of intercountry adoptions 
undertaken by the agency or person each year in both Convention and 
non-Convention cases and, for each case:
    (i) The Convention country or other country from which the child 
emigrated;
    (ii) The State to which the child immigrated;
    (iii) The State, Convention country, or other country in which the 
adoption was finalized;
    (iv) The age of the child; and
    (v) The date of the child's placement for adoption.
    (2) For cases involving children emigrating from the United States, 
information and reports on the total number of intercountry adoptions 
undertaken by the agency or person each year in both Convention and 
non-Convention cases and, for each case:
    (i) The State from which the child emigrated;
    (ii) The Convention country or other country to which the child 
immigrated;
    (iii) The State, Convention country, or other country in which the 
adoption was finalized;
    (iv) The age of the child; and
    (v) The date of the child's placement for adoption.
    (3) For each disrupted placement involving a Convention adoption, 
information and reports about the disruption, including information on:
    (i) The Convention country from which the child emigrated;
    (ii) The State to which the child immigrated;
    (iii) The age of the child;
    (iv) The date of the child's placement for adoption;
    (v) The reason(s) for and resolution(s) of the disruption of the 
placement for adoption, including information on the child's re-
placement for adoption and final legal adoption;
    (vi) The names of the agencies or persons that handled the 
placement for adoption; and
    (vii) The plans for the child.
    (4) Wherever possible, for each dissolution of a Convention 
adoption, information and reports on the dissolution, including 
information on:
    (i) The Convention country from which the child emigrated;
    (ii) The State to which the child immigrated;
    (iii) The age of the child;
    (iv) The date of the child's placement for adoption;
    (v) The reason(s) for and resolution(s) of the dissolution of the 
adoption, to the extent known by the agency or person;
    (vi) The names of the agencies or persons that handled the 
placement for adoption; and
    (vii) The plans for the child.
    (5) Information on the shortest, longest, and average length of 
time it takes to complete a Convention adoption, set forth by the 
child's country of origin, calculated from the time the child is 
matched with the prospective adoptive parent(s) until the time the 
adoption is finalized by a court, excluding any period for appeal;
    (6) Information on the range of adoption fees, including the 
lowest, highest, average, and the median of such fees, set forth by the 
child's country of origin, charged by the agency or person for 
Convention adoptions involving children immigrating to the United 
States in connection with their adoption.
    (c) If the agency or person provides adoption services in cases not 
subject to the Convention that involve a child emigrating from the 
United States for the purpose of adoption or after an adoption has been 
finalized, it provides such information as required by the Secretary 
directly to the Secretary and demonstrates to the accrediting entity 
that it has provided this information.
    (d) The agency or person provides any of the information described 
in paragraphs (a) through (c) of this section to the accrediting entity 
or the Secretary within thirty days of request.

Service Planning and Delivery


Sec.  96.44  Acting as primary provider.

    (a) When required by Sec.  96.14(a), the agency or person acts as 
primary provider and adheres to the provisions in Sec.  96.14(b) 
through (e). When acting as the primary provider, the agency or person 
develops and implements a service plan for providing all adoption 
services and provides all such services, either directly or through 
arrangements with supervised providers, exempted providers, public 
domestic authorities, competent authorities, Central Authorities, 
public foreign authorities, or, to the extent permitted by Sec.  
96.14(c), other foreign providers (agencies, persons, or other non-
governmental entities).
    (b) The agency or person has an organizational structure, financial 
and personnel resources, and policies and procedures in place that 
demonstrate that the agency or person is capable of

[[Page 8147]]

acting as a primary provider in any Convention adoption case and, when 
acting as the primary provider, provides appropriate supervision to 
supervised providers and verifies the work of other foreign providers 
in accordance with Sec. Sec.  96.45 and 96.46.


Sec.  96.45  Using supervised providers in the United States.

    (a) The agency or person, when acting as the primary provider and 
using supervised providers in the United States to provide adoption 
services, ensures that each such supervised provider:
    (1) Is in compliance with applicable State licensing and regulatory 
requirements in all jurisdictions in which it provides adoption 
services;
    (2) Does not engage in practices inconsistent with the Convention's 
principles of furthering the best interests of the child and preventing 
the sale, abduction, exploitation, or trafficking of children; and
    (3) Before entering into an agreement with the primary provider for 
the provision of adoption services, discloses to the primary provider 
the suitability information listed in Sec.  96.35.
    (b) The agency or person, when acting as the primary provider and 
using supervised providers in the United States to provide adoption 
services, ensures that each such supervised provider operates under a 
written agreement with the primary provider that:
    (1) Identifies clearly the adoption service(s) to be provided by 
the supervised provider and requires that the service(s) be provided in 
accordance with the applicable service standard(s) for accreditation 
and approval (for example: home study (Sec.  96.47); parent training 
(Sec.  96.48); child background studies and consent (Sec.  96.53));
    (2) Requires the supervised provider to comply with the following 
standards regardless of the type of adoption services it is providing: 
Sec.  96.36 (prohibition on child-buying), Sec.  96.34 (compensation), 
Sec.  96.38 (employee training), Sec.  96.39(d) (waivers of liability), 
and Sec.  96.41(b) through (e) (complaints);
    (3) Identifies specifically the lines of authority between the 
primary provider and the supervised provider, the employee of the 
primary provider who will be responsible for supervision, and the 
employee of the supervised provider who will be responsible for 
ensuring compliance with the written agreement;
    (4) States clearly the compensation arrangement for the services to 
be provided and the fees and expenses to be charged by the supervised 
provider;
    (5) Specifies whether the supervised provider's fees and expenses 
will be billed to and paid by the client(s) directly or billed to the 
client through the primary provider;
    (6) Provides that, if billing the client(s) directly for its 
service, the supervised provider will give the client(s) an itemized 
bill of all fees and expenses to be paid, with a written explanation of 
how and when such fees and expenses will be refunded if the service is 
not completed, and will return any funds collected to which the 
client(s) may be entitled within sixty days of the completion of the 
delivery of services;
    (7) Requires the supervised provider to meet the same personnel 
qualifications as accredited agencies and approved persons, as provided 
for in Sec.  96.37, except that, for purposes of Sec. Sec.  
96.37(e)(3), (f)(3), and (g)(2), the work of the employee must be 
supervised by an employee of an accredited agency or approved person;
    (8) Requires the supervised provider to limit the use of and 
safeguard personal data gathered or transmitted in connection with an 
adoption, as provided for in Sec.  96.42;
    (9) Requires the supervised provider to respond within a reasonable 
period of time to any request for information from the primary 
provider, the Secretary, or the accrediting entity that issued the 
primary provider's accreditation or approval;
    (10) Requires the supervised provider to provide the primary 
provider on a timely basis any data that is necessary to comply with 
the primary provider's reporting requirements;
    (11) Requires the supervised provider to disclose promptly to the 
primary provider any changes in the suitability information required by 
Sec.  96.35;
    (12) Permits suspension or termination of the agreement on 
reasonable notice if the primary provider has grounds to believe that 
the supervised provider is not in compliance with the agreement or the 
requirements of this section.


Sec.  96.46  Using providers in Convention countries.

    (a) The agency or person, when acting as the primary provider and 
using foreign supervised providers to provide adoption services in 
Convention countries, ensures that each such foreign supervised 
provider:
    (1) Is in compliance with the laws of the Convention country in 
which it operates;
    (2) Does not engage in practices inconsistent with the Convention's 
principles of furthering the best interests of the child and preventing 
the sale, abduction, exploitation, or trafficking of children;
    (3) Before entering into an agreement with the primary provider for 
the provision of adoption services, discloses to the primary provider 
the suitability information listed in Sec.  96.35, taking into account 
the authorities in the Convention country that are analogous to the 
authorities identified in that section;
    (4) Does not have a pattern of licensing suspensions or other 
sanctions and has not lost the right to provide adoption services in 
any jurisdiction for reasons germane to the Convention; and
    (5) Is accredited in the Convention country in which it operates, 
if such accreditation is required by the laws of that Convention 
country to perform the adoption services it is providing.
    (b) The agency or person, when acting as the primary provider and 
using foreign supervised providers to provide adoption services in 
Convention countries, ensures that each such foreign supervised 
provider operates under a written agreement with the primary provider 
that:
    (1) Identifies clearly the adoption service(s) to be provided by 
the foreign supervised provider;
    (2) Requires the foreign supervised provider, if responsible for 
obtaining medical or social information on the child, to comply with 
the standards in Sec.  96.49(d) through (j);
    (3) Requires the foreign supervised provider to adhere to the 
standard in Sec.  96.36(a) prohibiting child buying; and has written 
policies and procedures in place reflecting the prohibitions in Sec.  
96.36(a) and reinforces them in training programs for its employees and 
agents;
    (4) Requires the foreign supervised provider to compensate its 
directors, officers, and employees who provide intercountry adoption 
services on a fee-for-service, hourly wage, or salary basis, rather 
than based on whether a child is placed for adoption, located for an 
adoptive placement, or on a similar contingent fee basis;
    (5) Identifies specifically the lines of authority between the 
primary provider and the foreign supervised provider, the employee of 
the primary provider who will be responsible for supervision, and the 
employee of the supervised provider who will be responsible for 
ensuring compliance with the written agreement;
    (6) States clearly the compensation arrangement for the services to 
be provided and the fees and expenses to be charged by the foreign 
supervised provider;

[[Page 8148]]

    (7) Specifies whether the foreign supervised provider's fees and 
expenses will be billed to and paid by the client(s) directly or billed 
to the client through the primary provider;
    (8) Provides that, if billing the client(s) directly for its 
service, the foreign supervised provider will give the client(s) an 
itemized bill of all fees and expenses to be paid, with a written 
explanation of how and when such fees and expenses will be refunded if 
the service is not completed, and will return any funds collected to 
which the client(s) may be entitled within sixty days of the completion 
of the delivery of services;
    (9) Requires the foreign supervised provider to respond within a 
reasonable period of time to any request for information from the 
primary provider, the Secretary, or the accrediting entity that issued 
the primary provider's accreditation or approval;
    (10) Requires the foreign supervised provider to provide the 
primary provider on a timely basis any data that is necessary to comply 
with the primary provider's reporting requirements;
    (11) Requires the foreign supervised provider to disclose promptly 
to the primary provider any changes in the suitability information 
required by Sec.  96.35; and
    (12) Permits suspension or termination of the agreement on 
reasonable notice if the primary provider has grounds to believe that 
the foreign supervised provider is not in compliance with the agreement 
or the requirements of this section.
    (c) The agency or person, when acting as the primary provider and, 
in accordance with Sec.  96.14, using foreign providers that are not 
under its supervision, verifies, through review of the relevant 
documentation and other appropriate steps, that:
    (1) Any necessary consent to termination of parental rights or to 
adoption obtained by the foreign provider was obtained in accordance 
with applicable foreign law and Article 4 of the Convention;
    (2) Any background study and report on a child in a case involving 
immigration to the United States (an incoming case) performed by the 
foreign provider was performed in accordance with applicable foreign 
law and Article 16 of the Convention.
    (3) Any home study and report on prospective adoptive parent(s) in 
a case involving emigration from the United States (an outgoing case) 
performed by the foreign provider was performed in accordance with 
applicable foreign law and Article 15 of the Convention.

Standards for Cases in Which a Child Is Immigrating to the United 
States (Incoming Cases)


Sec.  96.47  Preparation of home studies in incoming cases.

    (a) The agency or person ensures that a home study on the 
prospective adoptive parent(s) (which for purposes of this section 
includes the initial report and any supplemental statement submitted to 
DHS) is completed that includes the following:
    (1) Information about the prospective adoptive parent(s)' identity, 
eligibility and suitability to adopt, background, family and medical 
history, social environment, reasons for adoption, ability to undertake 
an intercountry adoption, and the characteristics of the children for 
whom the prospective adoptive parent(s) would be qualified to care 
(specifying in particular whether they are willing and able to care for 
a child with special needs);
    (2) A determination whether the prospective adoptive parent(s) are 
eligible and suited to adopt;
    (3) A statement describing the counseling and training provided to 
the prospective adoptive parent(s);
    (4) The results of a criminal background check on the prospective 
adoptive parent(s) and any other individual for whom a check is 
required by 8 CFR 204.3(e);
    (5) A full and complete statement of all facts relevant to the 
eligibility and suitability of the prospective adoptive parent(s) to 
adopt a child under any specific requirements identified to the 
Secretary by the Central Authority of the child's country of origin; 
and
    (6) A statement in each copy of the home study that it is a true 
and accurate copy of the home study that was provided to the 
prospective adoptive parent(s) or DHS.
    (b) The agency or person ensures that the home study is performed 
in accordance with 8 CFR 204.3(e), and any applicable State law.
    (c) Where the home study is not performed in the first instance by 
an accredited agency or temporarily accredited agency, the agency or 
person ensures that the home study is reviewed and approved in writing 
by an accredited agency or temporarily accredited agency. The written 
approval must include a determination that the home study:
    (1) Includes all of the information required by paragraph (a) of 
this section and is performed in accordance with 8 CFR 204.3(e), and 
applicable State law; and
    (2) Was performed by an individual who meets the requirements in 
Sec.  96.37(f), or, if the individual is an exempted provider, ensures 
that the individual meets the requirements for home study providers 
established by 8 CFR 204.3(b).
    (d) The agency or person takes all appropriate measures to ensure 
the timely transmission of the same home study that was provided to the 
prospective adoptive parent(s) or to DHS to the Central Authority of 
the child's country of origin (or to an alternative authority 
designated by that Central Authority).


Sec.  96.48  Preparation and training of prospective adoptive parent(s) 
in incoming cases.

    (a) The agency or person provides prospective adoptive parent(s) 
with at least ten hours (independent of the home study) of preparation 
and training, as described in paragraphs (b) and (c) of this section, 
designed to promote a successful intercountry adoption. The agency or 
person provides such training before the prospective adoptive parent(s) 
travel to adopt the child or the child is placed with the prospective 
adoptive parent(s) for adoption.
    (b) The training provided by the agency or person addresses the 
following topics:
    (1) The intercountry adoption process, the general characteristics 
and needs of children awaiting adoption, and the in-country conditions 
that affect children in the Convention country from which the 
prospective adoptive parent(s) plan to adopt;
    (2) The effects on children of malnutrition, relevant environmental 
toxins, maternal substance abuse, and of any other known genetic, 
health, emotional, and developmental risk factors associated with 
children from the expected country of origin;
    (3) Information about the impact on a child of leaving familiar 
ties and surroundings, as appropriate to the expected age of the child;
    (4) Data on institutionalized children and the impact of 
institutionalization on children, including the effect on children of 
the length of time spent in an institution and of the type of care 
provided in the expected country of origin;
    (5) Information on attachment disorders and other emotional 
problems that institutionalized or traumatized children and children 
with a history of multiple caregivers may experience, before and after 
their adoption;
    (6) Information on the laws and adoption processes of the expected 
country of origin, including foreseeable delays and impediments to 
finalization of an adoption;

[[Page 8149]]

    (7) Information on the long-term implications for a family that has 
become multicultural through intercountry adoption; and
    (8) An explanation of any reporting requirements associated with 
Convention adoptions, including any post-placement or post-adoption 
reports required by the expected country of origin.
    (c) The agency or person also provides the prospective adoptive 
parent(s) with training that allows them to be as fully prepared as 
possible for the adoption of a particular child. This includes 
counseling on:
    (1) The child's history and cultural, racial, religious, ethnic, 
and linguistic background;
    (2) The known health risks in the specific region or country where 
the child resides; and
    (3) Any other medical, social, background, birth history, 
educational data, developmental history, or any other data known about 
the particular child.
    (d) The agency or person provides such training through appropriate 
methods, including:
    (1) Collaboration among agencies or persons to share resources to 
meet the training needs of prospective adoptive parents;
    (2) Group seminars offered by the agency or person or other 
agencies or training entities;
    (3) Individual counseling sessions;
    (4) Video, computer-assisted, or distance learning methods using 
standardized curricula; or
    (5) In cases where training cannot otherwise be provided, an 
extended home study process, with a system for evaluating the 
thoroughness with which the topics have been covered.
    (e) The agency or person provides additional in-person, 
individualized counseling and preparation, as needed, to meet the needs 
of the prospective adoptive parent(s) in light of the particular child 
to be adopted and his or her special needs, and any other training or 
counseling needed in light of the child background study or the home 
study.
    (f) The agency or person provides the prospective adoptive 
parent(s) with information about print, internet, and other resources 
available for continuing to acquire information about common 
behavioral, medical, and other issues; connecting with parent support 
groups, adoption clinics and experts; and seeking appropriate help when 
needed.
    (g) The agency or person exempts prospective adoptive parent(s) 
from all or part of the training and preparation that would normally be 
required for a specific adoption only when the agency or person 
determines that the prospective adoptive parent(s) have received 
adequate prior training or have prior experience as parent(s) of 
children adopted from abroad.
    (h) The agency or person records the nature and extent of the 
training and preparation provided to the prospective adoptive parent(s) 
in the adoption record.


Sec.  96.49  Provision of medical and social information in incoming 
cases.

    (a) The agency or person provides a copy of the child's medical 
records (including, to the fullest extent practicable, a correct and 
complete English-language translation of such records) to the 
prospective adoptive parent(s) as early as possible, but no later than 
two weeks before either the adoption or placement for adoption, or the 
date on which the prospective adoptive parent(s) travel to the 
Convention country to complete all procedures in such country relating 
to the adoption or placement for adoption, whichever is earlier.
    (b) Where any medical record provided pursuant to paragraph (a) of 
this section is a summary or compilation of other medical records, the 
agency or person includes those underlying medical records in the 
medical records provided pursuant to paragraph (a) if they are 
available.
    (c) The agency or person provides the prospective adoptive 
parent(s) with any untranslated medical reports or videotapes or other 
reports and provides an opportunity for the client(s) to arrange for 
their own translation of the records, including a translation into a 
language other than English, if needed.
    (d) The agency or person itself uses reasonable efforts, or 
requires its supervised provider in the child's country of origin who 
is responsible for obtaining medical information about the child on 
behalf of the agency or person to use reasonable efforts, to obtain 
available information, including in particular:
    (1) The date that the Convention country or other child welfare 
authority assumed custody of the child and the child's condition at 
that time;
    (2) History of any significant illnesses, hospitalizations, special 
needs, and changes in the child's condition since the Convention 
country or other child welfare authority assumed custody of the child;
    (3) Growth data, including prenatal and birth history, and 
developmental status over time and current developmental data at the 
time of the child's referral for adoption; and
    (4) Specific information on the known health risks in the specific 
region or country where the child resides.
    (e) If the agency or person provides medical information, other 
than the information provided by public foreign authorities, to the 
prospective adoptive parent(s) from an examination by a physician or 
from an observation of the child by someone who is not a physician, the 
agency or person uses reasonable efforts to include the following:
    (1) The name and credentials of the physician who performed the 
examination or the individual who observed the child;
    (2) The date of the examination or observation; how the report's 
information was retained and verified; and if anyone directly 
responsible for the child's care has reviewed the report;
    (3) If the medical information includes references, descriptions, 
or observations made by any individual other than the physician who 
performed the examination or the individual who performed the 
observation, the identity of that individual, the individual's 
training, and information on what data and perceptions the individual 
used to draw his or her conclusions;
    (4) A review of hospitalizations, significant illnesses, and other 
significant medical events, and the reasons for them;
    (5) Information about the full range of any tests performed on the 
child, including tests addressing known risk factors in the child's 
country of origin; and
    (6) Current health information.
    (f) The agency or person itself uses reasonable efforts, or 
requires its supervised provider in the child's country of origin who 
is responsible for obtaining social information about the child on 
behalf of the agency or person to use reasonable efforts, to obtain 
available information, including in particular:
    (1) Information about the child's birth family and prenatal history 
and cultural, racial, religious, ethnic, and linguistic background;
    (2) Information about all of the child's past and current 
placements prior to adoption, including, but not limited to any social 
work or court reports on the child and any information on who assumed 
custody and provided care for the child; and
    (3) Information about any birth siblings whose existence is known 
to the agency or person, or its supervised provider, including 
information about such siblings' whereabouts.
    (g) Where any of the information listed in paragraphs (d) and (f) 
of this

[[Page 8150]]

section cannot be obtained, the agency or person documents in the 
adoption record the efforts made to obtain the information and why it 
was not obtainable. The agency or person continues to use reasonable 
efforts to secure those medical or social records that could not be 
obtained up until the adoption is finalized.
    (h) Where available, the agency or person provides information for 
contacting the examining physician or the individual who made the 
observations to any physician engaged by the prospective adoptive 
parent(s), upon request.
    (i) The agency or person ensures that videotapes and photographs of 
the child are identified by the date on which the videotape or 
photograph was recorded or taken and that they were made in compliance 
with the laws in the country where recorded or taken.
    (j) The agency or person does not withhold from or misrepresent to 
the prospective adoptive parent(s) any available medical, social, or 
other pertinent information concerning the child.
    (k) The agency or person does not withdraw a referral until the 
prospective adoptive parent(s) have had two weeks (unless extenuating 
circumstances involving the child's best interests require a more 
expedited decision) to consider the needs of the child and their 
ability to meet those needs, and to obtain physician review of medical 
information and other descriptive information, including videotapes of 
the child if available.


Sec.  96.50  Placement and post-placement monitoring until final 
adoption in incoming cases.

    (a) The agency or person takes all appropriate measures to ensure 
that the transfer of the child takes place in secure and appropriate 
circumstances, with properly trained and qualified escorts, if used, 
and, if possible, in the company of the prospective adoptive parent(s).
    (b) In the post-placement phase, the agency or person monitors and 
supervises the child's placement to ensure that the placement remains 
in the best interests of the child, and ensures that at least the 
number of home visits required by State law or by the child's country 
of origin are performed, whichever is greater.
    (c) When a placement for adoption is in crisis in the post-
placement phase, the agency or person makes an effort to provide or 
arrange for counseling by an individual with appropriate skills to 
assist the family in dealing with the problems that have arisen.
    (d) If counseling does not succeed in resolving the crisis and the 
placement is disrupted, the agency or person assuming custody of the 
child assumes responsibility for making another placement of the child.
    (e) The agency or person acts promptly and in accord with any 
applicable legal requirements to remove the child when the placement 
may no longer be in the child's best interests, to provide temporary 
care, to find an eventual adoptive placement for the child, and, in 
consultation with the Secretary, to inform the Central Authority of the 
child's country of origin about any new prospective adoptive parent(s).
    (1) In all cases where removal of a child from a placement is 
considered, the agency or person considers the child's views when 
appropriate in light of the child's age and maturity and, when required 
by State law, obtains the consent of the child prior to removal.
    (2) The agency or person does not return from the United States a 
child placed for adoption in the United States unless the Central 
Authority of the country of origin and the Secretary have approved the 
return in writing.
    (f) The agency or person includes in the adoption services contract 
with the prospective adoptive parent(s) a plan describing the agency's 
or person's responsibilities if a placement for adoption is disrupted. 
This plan addresses:
    (1) Who will have legal and financial responsibility for transfer 
of custody in an emergency or in the case of impending disruption and 
for the care of the child;
    (2) If the disruption takes place after the child has arrived in 
the United States, under what circumstances the child will, as a last 
resort, be returned to the child's country of origin, if that is 
determined to be in the child's best interests;
    (3) How the child's wishes, age, length of time in the United 
States, and other pertinent factors will be taken into account; and
    (4) How the Central Authority of the child's country of origin and 
the Secretary will be notified.
    (g) The agency or person provides post-placement reports until 
final adoption of a child to the Convention country when required by 
the Convention country. Where such reports are required, the agency or 
person:
    (1) Informs the prospective adoptive parent(s) in the adoption 
services contract of the requirement prior to the referral of the child 
for adoption;
    (2) Informs the prospective adoptive parent(s) that they will be 
required to provide all necessary information for the report(s); and
    (3) Discloses who will prepare the reports and the fees that will 
be charged.
    (h) The agency or person takes steps to:
    (1) Ensure that an order declaring the adoption as final is sought 
by the prospective adoptive parent(s), and entered in compliance with 
section 301(c) of the IAA (42 U.S.C. 14931(c)); and
    (2) Notify the Secretary of the finalization of the adoption within 
thirty days of the entry of the order.


Sec.  96.51  Post-adoption services in incoming cases.

    (a) The agency or person takes all appropriate measures to ensure 
that the transfer of the child takes place in secure and appropriate 
circumstances, with properly trained and qualified escorts, if used, 
and, if possible, in the company of the adoptive parent(s).
    (b) The agency or person informs the prospective adoptive parent(s) 
in the adoption services contract whether the agency or person will or 
will not provide any post-adoption services. The agency or person also 
informs the prospective adoptive parent(s) in the adoption services 
contract whether it will provide services if an adoption is dissolved, 
and, if it indicates it will, it provides a plan describing the 
agency's or person's responsibilities.
    (c) When post-adoption reports are required by the child's country 
of origin, the agency or person includes a requirement for such reports 
in the adoption services contract and makes good-faith efforts to 
encourage adoptive parent(s) to provide such reports.
    (d) The agency or person does not return from the United States an 
adopted child whose adoption has been dissolved unless the Central 
Authority of the country of origin and the Secretary have approved the 
return in writing.


Sec.  96.52  Performance of Convention communication and coordination 
functions in incoming cases.

    (a) The agency or person keeps the Central Authority of the 
Convention country and the Secretary informed as necessary about the 
adoption process and the measures taken to complete it, as well as 
about the progress of the placement if a probationary period is 
required.
    (b) The agency or person takes all appropriate measures, consistent 
with the procedures of the U.S. Central Authority and of the Convention 
country, to:
    (1) Transmit on a timely basis the home study to the Central 
Authority or

[[Page 8151]]

other competent authority of the child's country of origin;
    (2) Obtain the child background study, proof that the necessary 
consents to the child's adoption have been obtained, and the necessary 
determination that the prospective placement is in the child's best 
interests, from the Central Authority or other competent authority in 
the child's country of origin;
    (3) Provide confirmation that the prospective adoptive parent(s) 
agree to the adoption to the Central Authority or other competent 
authority in the child's country of origin; and
    (4) Transmit the determination that the child is or will be 
authorized to enter and reside permanently in the United States to the 
Central Authority or other competent authority in the child's country 
of origin.
    (c) The agency or person takes all necessary and appropriate 
measures, consistent with the procedures of the Convention country, to 
obtain permission for the child to leave his or her country of origin 
and to enter and reside permanently in the United States.
    (d) Where the transfer of the child does not take place, the agency 
or person returns the home study on the prospective adoptive parent(s) 
and/or the child background study to the authorities that forwarded 
them.
    (e) The agency or person takes all necessary and appropriate 
measures to perform any tasks in a Convention adoption case that the 
Secretary identifies are required to comply with the Convention, the 
IAA, or any regulations implementing the IAA.

Standards for Cases in Which a Child Is Emigrating From the United 
States (Outgoing Cases)


Sec.  96.53  Background studies on the child and consents in outgoing 
cases.

    (a) The agency or person takes all appropriate measures to ensure 
that a child background study is performed that includes information 
about the child's identity, adoptability, background, social 
environment, family history, medical history (including that of the 
child's family), and any special needs of the child. The child 
background study must include the following:
    (1) Information that demonstrates that consents were obtained in 
accordance with paragraph (c) of this section;
    (2) Information that demonstrates consideration of the child's 
wishes and opinions in accordance with paragraph (d) of this section 
and;
    (3) Information that confirms that the child background study was 
prepared either by an exempted provider or by an individual who meets 
the requirements set forth in Sec.  96.37(g).
    (b) Where the child background study is not prepared in the first 
instance by an accredited agency or temporarily accredited agency, the 
agency or person ensures that the child background study is reviewed 
and approved in writing by an accredited agency or temporarily 
accredited agency. The written approval must include a determination 
that the background study includes all the information required by 
paragraph (a) of this section.
    (c) The agency or person takes all appropriate measures to ensure 
that consents have been obtained as follows:
    (1) The persons, institutions, and authorities whose consent is 
necessary for adoption have been counseled as necessary and duly 
informed of the effects of their consent, in particular, whether or not 
an adoption will result in the termination of the legal relationship 
between the child and his or her family of origin;
    (2) All such persons, institutions, and authorities have given 
their consents;
    (3) The consents have been expressed or evidenced in writing in the 
required legal form, have been given freely, were not induced by 
payments or compensation of any kind, and have not been withdrawn;
    (4) The consent of the mother, where required, was executed after 
the birth of the child;
    (5) The child, as appropriate in light of his or her age and 
maturity, has been counseled and duly informed of the effects of the 
adoption and of his or her consent to the adoption; and
    (6) The child's consent, where required, has been given freely, in 
the required legal form, and expressed or evidenced in writing and not 
induced by payment or compensation of any kind.
    (d) If the child is twelve years of age or older, or as otherwise 
provided by State law, the agency or person gives due consideration to 
the child's wishes or opinions before determining that an intercountry 
placement is in the child's best interests.
    (e) The agency or person prior to the child's adoption takes all 
appropriate measures to transmit to the Central Authority or other 
competent authority or accredited bodies of the Convention country the 
child background study, proof that the necessary consents have been 
obtained, and the reasons for its determination that the placement is 
in the child's best interests. In doing so, the agency or person, as 
required by Article 16(2) of the Convention, does not reveal the 
identity of the mother or the father if these identities may not be 
disclosed under State law.


Sec.  96.54  Placement standards in outgoing cases.

    (a) Except in the case of adoption by relatives or in the case in 
which the birth parent(s) have identified specific prospective adoptive 
parent(s) or in other special circumstances accepted by the State court 
with jurisdiction over the case, the agency or person makes reasonable 
efforts to find a timely adoptive placement for the child in the United 
States by:
    (1) Disseminating information on the child and his or her 
availability for adoption through print, media, and internet resources 
designed to communicate with potential prospective adoptive parent(s) 
in the United States;
    (2) Listing information about the child on a national or State 
adoption exchange or registry for at least sixty calendar days after 
the birth of the child;
    (3) Responding to inquiries about adoption of the child; and
    (4) Providing a copy of the child background study to potential 
U.S. prospective adoptive parent(s).
    (b) The agency or person demonstrates to the satisfaction of the 
State court with jurisdiction over the adoption that sufficient 
reasonable efforts (including no efforts, when in the best interests of 
the child) to find a timely and qualified adoptive placement for the 
child in the United States were made.
    (c) In placing the child for adoption, the agency or person:
    (1) To the extent consistent with State law, gives significant 
weight to the placement preferences expressed by the birth parent(s) in 
all voluntary placements;
    (2) To the extent consistent with State law, makes diligent efforts 
to place siblings together for adoption and, where placement together 
is not possible, to arrange for contact between separated siblings, 
unless it is in the best interests of one of the siblings that such 
efforts or contact not take place; and
    (3) Complies with all applicable requirements of the Indian Child 
Welfare Act.
    (d) The agency or person complies with any State law requirements 
pertaining to the provision and payment of independent legal counsel 
for birth parents. If State law requires full disclosure to the birth 
parent(s) that the child is to be adopted by parent(s) who reside 
outside the United States, the agency or person provides such 
disclosure.

[[Page 8152]]

    (e) The agency or person takes all appropriate measures to give due 
consideration to the child's upbringing and to his or her ethnic, 
religious, and cultural background.
    (f) When particular prospective adoptive parent(s) in a Convention 
country have been identified, the agency or person takes all 
appropriate measures to determine whether the envisaged placement is in 
the best interests of the child, on the basis of the child background 
study and the home study on the prospective adoptive parent(s).
    (g) The agency or person thoroughly prepares the child for the 
transition to the Convention country, using age-appropriate services 
that address the child's likely feelings of separation, grief, and loss 
and difficulties in making any cultural, religious, racial, ethnic, or 
linguistic adjustment.
    (h) The agency or person takes all appropriate measures to ensure 
that the transfer of the child takes place in secure and appropriate 
circumstances, with properly trained and qualified escorts, if used, 
and, if possible, in the company of the adoptive parent(s) or the 
prospective adoptive parent(s);
    (i) Before the placement for adoption proceeds, the agency or 
person identifies the entity in the receiving country that will provide 
post-placement supervision and reports, if required by State law, and 
ensures that the child's adoption record contains the information 
necessary for contacting that entity.
    (j) The agency or person ensures that the child's adoption record 
includes the order granting the adoption or legal custody for the 
purpose of adoption in the Convention country.
    (k) The agency or person consults with the Secretary before 
arranging for the return to the United States of any child who has 
emigrated to a Convention country in connection with the child's 
adoption.


Sec.  96.55  Performance of Convention communication and coordination 
functions in outgoing cases.

    (a) The agency or person keeps the Central Authority of the 
Convention country and the Secretary informed as necessary about the 
adoption process and the measures taken to complete it, as well as 
about the progress of the placement if a probationary period is 
required.
    (b) The agency or person ensures that:
    (1) Copies of all documents from the State court proceedings, 
including the order granting the adoption or legal custody, are 
provided to the Secretary;
    (2) Any additional information on the adoption is transmitted to 
the Secretary promptly upon request; and
    (3) It otherwise facilitates, as requested, the Secretary's ability 
to provide the certification that the child has been adopted or that 
custody has been granted for the purpose of adoption, in accordance 
with the Convention and the IAA.
    (c) Where the transfer of the child does not take place, the agency 
or person returns the home study on the prospective adoptive parent(s) 
and/or the child background study to the authorities that forwarded 
them.
    (d) The agency or person provides to the State court with 
jurisdiction over the adoption:
    (1) Proof that consents have been given as required in Sec.  
96.53(c);
    (2) An English copy or certified English translation of the home 
study on the prospective adoptive parent(s) in the Convention country, 
and the determination by the agency or person that the placement with 
the prospective adoptive parent(s) is in the child's best interests;
    (3) Evidence that the prospective adoptive parent(s) in the 
Convention country agree to the adoption;
    (4) Evidence that the child will be authorized to enter and reside 
permanently in the Convention country or on the same basis as that of 
the prospective adoptive parent(s); and
    (5) Evidence that the Central Authority of the Convention country 
has agreed to the adoption, if such consent is necessary under its laws 
for the adoption to become final.
    (e) The agency or person makes the showing required by Sec.  
96.54(b) to the State court with jurisdiction over the adoption.
    (f) The agency or person takes all necessary and appropriate 
measures to perform any tasks in a Convention adoption case that the 
Secretary identifies are required to comply with the Convention, the 
IAA, or any regulations implementing the IAA.


Sec.  96.56  [Reserved]

Subpart G--Decisions on Applications for Accreditation or Approval


Sec.  96.57  Scope.

    The provisions in this subpart establish the procedures for when 
the accrediting entity issues decisions on applications for 
accreditation or approval. Temporary accreditation is governed by the 
provisions in subpart N of this part. Unless otherwise provided in 
subpart N of this part, the provisions in this subpart do not apply to 
agencies seeking temporary accreditation.


Sec.  96.58  Notification of accreditation and approval decisions.

    (a) The accrediting entity must notify agencies and persons that 
applied by the transitional application deadline of its accreditation 
and approval decisions on a uniform notification date to be established 
by the Secretary. On that date, the accrediting entity must inform each 
applicant and the Secretary in writing whether the agency's or person's 
application has been granted or denied or remains pending. The 
accrediting entity may not provide any information about its 
accreditation or approval decisions to any agency or person or to the 
public until the uniform notification date. If the Secretary requests 
information on the interim or final status of an applicant prior to the 
uniform notification date, the accrediting entity must provide such 
information to the Secretary.
    (b) Notwithstanding the provisions in paragraph (a) of this 
section, the accrediting entity may, in its discretion, communicate 
with agencies and persons that applied by the transitional application 
date about the status of their pending applications for the sole 
purpose of affording them an opportunity to correct deficiencies that 
may hinder or prevent accreditation or approval.
    (c) The accrediting entity must routinely inform applicants that 
applied after the transitional application date in writing of its 
accreditation and approval decisions, as those decisions are finalized, 
but may not do so earlier than the uniform notification date referenced 
in paragraph (a) of this section. The accrediting entity must routinely 
provide this information to the Secretary in writing.


Sec.  96.59  Review of decisions to deny accreditation or approval.

    (a) There is no administrative or judicial review of an accrediting 
entity's decision to deny an application for accreditation or approval. 
As provided in Sec.  96.79, a decision to deny for these purposes 
includes:
    (1) A denial of the agency's or person's initial application for 
accreditation or approval;
    (2) A denial of an application made after cancellation or refusal 
to renew by the accrediting entity; and
    (3) A denial of an application made after cancellation or debarment 
by the Secretary.
    (b) The agency or person may petition the accrediting entity for 
reconsideration of a denial. The accrediting entity must establish 
internal review procedures that provide an opportunity for an agency or 
person

[[Page 8153]]

to petition for reconsideration of the denial.


Sec.  96.60  Length of accreditation or approval period.

    (a) Except as provided in paragraph (b) of this section, the 
accrediting entity will accredit or approve an agency or person for a 
period of four years. The accreditation or approval period will 
commence either on the date the Convention enters into force for the 
United States (if the agency or person is accredited or approved before 
that date) or on the date that the agency or person is granted 
accreditation or approval.
    (b) In order to stagger the renewal requests from agencies and 
persons that applied for accreditation or approval by the transitional 
application deadline, to prevent renewal requests from coming due at 
the same time, the accrediting entity may accredit or approve some 
agencies and persons that applied by the transitional application date 
for a period of between three and five years for their first 
accreditation or approval cycle. The accrediting entity must establish 
criteria, to be approved by the Secretary, for choosing which agencies 
and persons it will accredit or approve for a period of other than four 
years.


Sec.  96.61  [Reserved]

Subpart H--Renewal of Accreditation or Approval


Sec.  96.62  Scope.

    The provisions in this subpart establish the procedures for renewal 
of an agency's accreditation or a person's approval. Temporary 
accreditation may not be renewed, and the provisions in this subpart do 
not apply to temporarily accredited agencies.


Sec.  96.63  Renewal of accreditation or approval.

    (a) The accrediting entity must advise accredited agencies and 
approved persons that it monitors of the date by which they should seek 
renewal of their accreditation or approval so that the renewal process 
can reasonably be completed prior to the expiration of the agency's or 
person's current accreditation or approval. If the accredited agency or 
approved person does not wish to renew its accreditation or approval, 
it must immediately notify the accrediting entity and take all 
necessary steps to complete its Convention cases and to transfer its 
pending Convention cases and adoption records to other accredited 
agencies, approved persons, or a State archive, as appropriate, under 
the oversight of the accrediting entity, before its accreditation or 
approval expires.
    (b) The accredited agency or approved person may seek renewal from 
a different accrediting entity than the one that handled its prior 
application. If it changes accrediting entities, the accredited agency 
or approved person must so notify the accrediting entity that handled 
its prior application by the date on which the agency or person must 
(pursuant to paragraph (a) of this section) seek renewal of its status. 
The accredited agency or approved person must follow the new 
accrediting entity's instructions when submitting a request for renewal 
and preparing documents and other information for the new accrediting 
entity to review in connection with the renewal request.
    (c) The accrediting entity must process the request for renewal in 
a timely fashion. Before deciding whether to renew the accreditation or 
approval of an agency or person, the accrediting entity may, in its 
discretion, advise the agency or person of any deficiencies that may 
hinder or prevent its renewal and defer a decision to allow the agency 
or person to correct the deficiencies. The accrediting entity must 
notify the accredited agency, approved person, and the Secretary in 
writing when it renews or refuses to renew an agency's or person's 
accreditation or approval.
    (d) Sections 96.24, 96.25, and 96.26, which relate to evaluation 
procedures and to requests for and use of information, and Sec.  96.27, 
which relates to the substantive criteria for evaluating applicants for 
accreditation or approval, other than Sec.  96.27(e), will govern 
determinations about whether to renew accreditation or approval. In 
lieu of Sec.  96.27(e), if the agency or person has been suspended by 
an accrediting entity or the Secretary during its most current 
accreditation or approval cycle, the accrediting entity may take the 
reasons underlying the suspension into account when determining whether 
to renew accreditation or approval and may refuse to renew 
accreditation or approval based on the prior suspension.


Sec.  96.64  [Reserved]

Subpart I--Routine Oversight by Accrediting Entities


Sec.  96.65  Scope.

    The provisions in this subpart establish the procedures for routine 
oversight of accredited agencies and approved persons. Temporary 
accreditation is governed by the provisions of subpart N of this part. 
Unless otherwise provided in subpart N of this part, the provisions in 
this subpart do not apply to temporarily accredited agencies.


Sec.  96.66  Oversight of accredited agencies and approved persons by 
the accrediting entity.

    (a) The accrediting entity must monitor agencies it has accredited 
and persons it has approved at least annually to ensure that they are 
in substantial compliance with the standards in subpart F of this part, 
as determined using a method approved by the Secretary in accordance 
with Sec.  96.27(d). The accrediting entity must investigate complaints 
about accredited agencies and approved persons, as provided in subpart 
J of this part.
    (b) An accrediting entity may, on its own initiative, conduct site 
visits to inspect an agency's or person's premises or programs, with or 
without advance notice, for purposes of random verification of its 
continued compliance or to investigate a complaint. The accrediting 
entity may consider any information about the agency or person that 
becomes available to it about the compliance of the agency or person. 
The provisions of Sec. Sec.  96.25 and 96.26 govern requests for and 
use of information.
    (c) The accrediting entity must require accredited agencies or 
approved persons to attest annually that they have remained in 
substantial compliance and to provide supporting documentation to 
indicate such ongoing compliance with the standards in subpart F of 
this part.


Sec.  96.67  [Reserved]

Subpart J--Oversight Through Review of Complaints


Sec.  96.68  Scope.

    The provisions in this subpart establish the procedures that the 
accrediting entity will use for processing complaints against 
accredited agencies and approved persons (including complaints 
concerning their use of supervised providers) that raise an issue of 
compliance with the Convention, the IAA, or the regulations 
implementing the IAA, as determined by the accrediting entity or the 
Secretary, and that are therefore relevant to the oversight functions 
of the accrediting entity or the Secretary. Temporary accreditation is 
governed by the provisions of subpart N of this part; as provided in 
Sec.  96.103, procedures for processing complaints on temporarily 
accredited agencies must comply with this subpart.


Sec.  96.69  Filing of complaints against accredited agencies and 
approved persons.

    (a) Complaints described in Sec.  96.68 will be subject to review 
by the accrediting entity pursuant to Sec. Sec.  96.71

[[Page 8154]]

and 96.72, when submitted as provided in this section and Sec.  96.70.
    (b) Complaints against accredited agencies and approved persons by 
parties to specific Convention adoption cases and relating to that case 
must first be submitted by the complainant in writing to the primary 
provider and to the agency or person providing adoption services, if a 
U.S. provider different from the primary provider. If the complaint 
cannot be resolved through the complaint processes of the primary 
provider or the agency or person providing the services (if different), 
or if the complaint was resolved by an agreement to take action but the 
primary provider or the agency or person providing the service (if 
different) failed to take such action within thirty days of agreeing to 
do so, the complaint may then be filed with the Complaint Registry in 
accordance with Sec.  96.70.
    (c) An individual who is not party to a specific Convention 
adoption case but who has information about an accredited agency or 
approved person may provide that information by filing it in the form 
of a complaint with the Complaint Registry in accordance with Sec.  
96.70.
    (d) A Federal, State, or local government official or a foreign 
Central Authority may file a complaint with the Complaint Registry in 
accordance with Sec.  96.70, or may raise the matter in writing 
directly with the accrediting entity, who will record the complaint in 
the Complaint Registry, or with the Secretary, who will record the 
complaint in the Complaint Registry, if appropriate, and refer it to 
the accrediting entity for review pursuant to Sec.  96.71 or take such 
other action as the Secretary deems appropriate.


Sec.  96.70  Operation of the Complaint Registry.

    (a) The Secretary will establish a Complaint Registry to support 
the accrediting entities in fulfilling their oversight 
responsibilities, including the responsibilities of recording, 
screening, referring, and otherwise taking action on complaints 
received, and to support the Secretary in the Secretary's oversight 
responsibilities as the Secretary deems appropriate. The Secretary may 
provide for the Complaint Registry to be funded in whole or in part 
from fees collected by the Secretary pursuant to section 403(b) of the 
IAA (42 U.S.C. 14943(b)) or by the accrediting entities.
    (b) The Complaint Registry will:
    (1) Receive and maintain records of complaints about accredited 
agencies, temporarily accredited agencies, and approved persons 
(including complaints concerning their use of supervised providers) and 
make such complaints available to the appropriate accrediting entity 
and the Secretary;
    (2) Receive and maintain information regarding action taken to 
resolve each complaint by the accrediting entity or the Secretary;
    (3) Track compliance with any deadlines applicable to the 
resolution of complaints;
    (4) Generate reports designed to show possible patterns of 
complaints; and
    (5) Perform such other functions as the Secretary may determine.
    (c) Forms and information necessary to submit complaints to the 
Complaint Registry electronically or by such other means as the 
Secretary may determine will be accessible through the Department's 
website to persons who wish to file complaints. Such forms will be 
designed to ensure that each complaint complies with the requirements 
of Sec.  96.69.
    (d) Accrediting entities will have access to, and the capacity to 
enter data into, the Complaint Registry as the Secretary deems 
appropriate.
    (e) Nothing in this part shall be construed to limit the 
Secretary's authority to take such action as the Secretary deems 
appropriate with respect to complaints.


Sec.  96.71  Review by the accrediting entity of complaints against 
accredited agencies and approved persons.

    (a) The accrediting entity must establish written procedures, 
including deadlines, for recording, investigating, and acting upon 
complaints it receives pursuant to Sec. Sec.  96.69 and 96.70(b)(1). 
The procedures must be consistent with this section and be approved by 
the Secretary. The accrediting entity must make written information 
about its complaint procedures available upon request.
    (b) If the accrediting entity determines that a complaint 
implicates the Convention, the IAA, or the regulations implementing the 
IAA:
    (1) The accrediting entity must verify that the complainant has 
already attempted to resolve the complaint as described in Sec.  
96.69(b) and, if not, may refer the complaint to the agency or person, 
or to the primary provider, for attempted resolution through its 
internal complaint procedures;
    (2) The accrediting entity may conduct whatever investigative 
activity (including site visits) it considers necessary to determine 
whether any relevant accredited agency or approved person may maintain 
accreditation or approval as provided in Sec.  96.27. The provisions of 
Sec. Sec.  96.25 and 96.26 govern requests for and use of information. 
The accrediting entity must give priority to complaints submitted 
pursuant to Sec.  96.69(d);
    (3) If the accrediting entity determines that the agency or person 
may not maintain accreditation or approval, it must take adverse action 
pursuant to subpart K of this part.
    (c) When the accrediting entity has completed its complaint review 
process, it must provide written notification of the outcome of its 
investigation, and any actions taken, to the complainant, or to any 
other entity that referred the information.
    (d) The accrediting entity will enter information about the 
outcomes of its investigations and its actions on complaints into the 
Complaint Registry as provided in its agreement with the Secretary.
    (e) The accrediting entity may not take any action to discourage an 
individual from, or retaliate against an individual for, making a 
complaint, expressing a grievance, questioning the conduct of, or 
expressing an opinion about the performance of an accredited agency, an 
approved person, or the accrediting entity.


Sec.  96.72  Referral of complaints to the Secretary and other 
authorities.

    (a) An accrediting entity must report promptly to the Secretary any 
substantiated complaint that:
    (1) Reveals that an accredited agency or approved person has 
engaged in a pattern of serious, willful, grossly negligent, or 
repeated failures to comply with the standards in subpart F of this 
part; or
    (2) Indicates that continued accreditation or approval would not be 
in the best interests of the children and families concerned.
    (b) An accrediting entity must, after consultation with the 
Secretary, refer, as appropriate, to a State licensing authority, the 
Attorney General, or other law enforcement authorities any 
substantiated complaints that involve conduct that is:
    (1) Subject to the civil or criminal penalties imposed by section 
404 of the IAA (42 U.S.C. 14944);
    (2) In violation of the Immigration and Nationality Act (8 U.S.C. 
1101 et seq.); or
    (3) Otherwise in violation of Federal, State, or local law.
    (c) When an accrediting entity makes a report pursuant to 
paragraphs (a) or (b) of this section, it must indicate whether it is 
recommending that the Secretary take action to debar the agency or 
person, either temporarily or permanently.

[[Page 8155]]

Sec.  96.73  [Reserved]

Subpart K--Adverse Action by the Accrediting Entity


Sec.  96.74  Scope.

    The provisions in this subpart establish the procedures governing 
adverse action by an accrediting entity against accredited agencies and 
approved persons. Temporary accreditation is governed by the provisions 
in subpart N of this part. Unless otherwise provided in subpart N of 
this part, the provisions of this subpart do not apply to temporarily 
accredited agencies.


Sec.  96.75  Adverse action against accredited agencies or approved 
persons not in substantial compliance.

    The accrediting entity must take adverse action when it determines 
that an accredited agency or approved person may not maintain 
accreditation or approval as provided in Sec.  96.27. The accrediting 
entity is authorized to take any of the following actions against an 
accredited agency or approved person whose compliance the entity 
oversees. Each of these actions by an accrediting entity is considered 
an adverse action for purposes of the IAA and the regulations in this 
part:
    (a) Suspending accreditation or approval;
    (b) Canceling accreditation or approval;
    (c) Refusing to renew accreditation or approval;
    (d) Requiring an accredited agency or approved person to take a 
specific corrective action to bring itself into compliance; and
    (e) Imposing other sanctions including, but not limited to, 
requiring an accredited agency or approved person to cease providing 
adoption services in a particular case or in a specific Convention 
country.


Sec.  96.76  Procedures governing adverse action by the accrediting 
entity.

    (a) The accrediting entity must decide which adverse action to take 
based on the seriousness and type of violation and on the extent to 
which the accredited agency or approved person has corrected or failed 
to correct deficiencies of which it has been previously informed. The 
accrediting entity must notify an accredited agency or approved person 
in writing of its decision to take an adverse action against the agency 
or person. The accrediting entity's written notice must identify the 
deficiencies prompting imposition of the adverse action.
    (b) Before taking adverse action, the accrediting entity may, in 
its discretion, advise an accredited agency or approved person in 
writing of any deficiencies in its performance that may warrant an 
adverse action and provide it with an opportunity to demonstrate that 
an adverse action would be unwarranted before the adverse action is 
imposed. If the accrediting entity takes the adverse action without 
such prior notice, it must provide a similar opportunity to demonstrate 
that the adverse action was unwarranted after the adverse action is 
imposed, and may withdraw the adverse action based on the information 
provided.
    (c) The provisions in Sec. Sec.  96.25 and 96.26 govern requests 
for and use of information.


Sec.  96.77  Responsibilities of the accredited agency, approved 
person, and accrediting entity following adverse action by the 
accrediting entity.

    (a) If the accrediting entity takes an adverse action against an 
agency or person, the action will take effect immediately unless the 
accrediting entity agrees to a later effective date.
    (b) If the accrediting entity suspends or cancels the accreditation 
or approval of an agency or person, the agency or person must 
immediately, or by any later effective date set by the accrediting 
entity, cease to provide adoption services in all Convention cases. In 
the case of suspension, it must consult with the accrediting entity 
about whether to transfer its Convention adoption cases and adoption 
records. In the case of cancellation, it must execute the plans 
required by Sec. Sec.  96.33(e) and 96.42(d) under the oversight of the 
accrediting entity, and transfer its Convention adoption cases and 
adoption records to other accredited agencies, approved persons, or a 
State archive, as appropriate. When the agency or person is unable to 
transfer such Convention cases or adoption records in accordance with 
the plans or as otherwise agreed by the accrediting entity, the 
accrediting entity will so advise the Secretary who, with the 
assistance of the accrediting entity, will coordinate efforts to 
identify other accredited agencies or approved persons to assume 
responsibility for the cases, and to transfer the records to other 
accredited agencies or approved persons, or to public domestic 
authorities, as appropriate.
    (c) If the accrediting entity refuses to renew the accreditation or 
approval of an agency or person, the agency or person must cease to 
provide adoption services in all Convention cases upon expiration of 
its existing accreditation or approval. It must take all necessary 
steps to complete its Convention cases before its accreditation or 
approval expires. It must also execute the plans required by Sec. Sec.  
96.33(e) and 96.42(d) under the oversight of the accrediting entity, 
and transfer its pending Convention cases and adoption records to other 
accredited agencies, approved persons, or a State archive, as 
appropriate. When the agency or person is unable to transfer such 
Convention cases or adoption records in accordance with the plans or as 
otherwise agreed by the accrediting entity, the accrediting entity will 
so advise the Secretary who, with the assistance of the accrediting 
entity, will coordinate efforts to identify other accredited agencies 
or approved persons to assume responsibility for the cases and to 
transfer the records to other accredited agencies or approved persons, 
or to public domestic authorities, as appropriate.
    (d) The accrediting entity must notify the Secretary, in accordance 
with procedures established in its agreement with the Secretary, when 
it takes an adverse action that changes the accreditation or approval 
status of an agency or person. The accrediting entity must also notify 
the relevant State licensing authority as provided in the agreement.


Sec.  96.78  Accrediting entity procedures to terminate adverse action.

    (a) The accrediting entity must maintain internal petition 
procedures, approved by the Secretary, to give accredited agencies and 
approved persons an opportunity to terminate adverse actions on the 
grounds that the deficiencies necessitating the adverse action have 
been corrected. The accrediting entity must inform the agency or person 
of these procedures when it informs them of the adverse action pursuant 
to Sec.  96.76(a). An accrediting entity is not required to maintain 
procedures to terminate adverse actions on any other grounds, or to 
maintain procedures to review its adverse actions, and must obtain the 
consent of the Secretary if it wishes to make such procedures 
available.
    (b) An accrediting entity may terminate an adverse action it has 
taken only if the agency or person demonstrates to the satisfaction of 
the accrediting entity that the deficiencies that led to the adverse 
action have been corrected. The accrediting entity must notify an 
agency or person in writing of its decision on the petition to 
terminate the adverse action.
    (c) If the accrediting entity described in paragraph (b) of this 
section is no longer providing accreditation or approval services, the 
agency or person may petition any accrediting entity with jurisdiction 
over its application.

[[Page 8156]]

    (d) If the accrediting entity cancels or refuses to renew an 
agency's or person's accreditation or approval, and does not terminate 
the adverse action pursuant to paragraph (b) of this section, the 
agency or person may reapply for accreditation or approval. Before 
doing so, the agency or person must request and obtain permission to 
make a new application from the accrediting entity that cancelled or 
refused to renew its accreditation or approval or, if such entity is no 
longer designated as an accrediting entity, from any alternate 
accrediting entity designated by the Secretary to give such permission. 
The accrediting entity may grant such permission only if the agency or 
person demonstrates to the satisfaction of the accrediting entity that 
the specific deficiencies that led to the cancellation or refusal to 
renew have been corrected.
    (e) If the accrediting entity grants the agency or person 
permission to reapply, the agency or person may file an application 
with that accrediting entity in accordance with subpart D of this part.
    (f) Nothing in this section shall be construed to prevent an 
accrediting entity from withdrawing an adverse action if it concludes 
that the action was based on a mistake of fact or was otherwise in 
error. Upon taking such action, the accrediting entity will take 
appropriate steps to notify the Secretary and the Secretary will take 
appropriate steps to notify the Permanent Bureau of the Hague 
Conference on Private International Law.


Sec.  96.79  Administrative or judicial review of adverse action by the 
accrediting entity.

    (a) Except to the extent provided by the procedures in Sec.  96.78, 
an adverse action by an accrediting entity shall not be subject to 
administrative review.
    (b) Section 202(c)(3) of the IAA (42 U.S.C. 14922(c)(3)) provides 
for judicial review in Federal court of adverse actions by an 
accrediting entity, regardless of whether the entity is described in 
Sec.  96.5(a) or (b). When any petition brought under section 202(c)(3) 
raises as an issue whether the deficiencies necessitating the adverse 
action have been corrected, the procedures maintained by the 
accrediting entity pursuant to Sec.  96.78 must first be exhausted. 
Adverse actions are only those actions listed in Sec.  96.75. There is 
no judicial review of an accrediting entity's decision to deny 
accreditation or approval, including:
    (1) A denial of an initial application;
    (2) A denial of an application made after cancellation or refusal 
to renew by the accrediting entity; and
    (3) A denial of an application made after cancellation or debarment 
by the Secretary.
    (c) In accordance with section 202(c)(3) of the IAA (42 U.S.C. 
14922(c)(3)), an accredited agency or approved person that is the 
subject of an adverse action by an accrediting entity may petition the 
United States district court in the judicial district in which the 
agency is located or the person resides to set aside the adverse action 
imposed by the accrediting entity. The United States district court 
shall review the adverse action in accordance with 5 U.S.C. 706. When 
an accredited agency or approved person petitions a United States 
district court to review the adverse action of an accrediting entity, 
the accrediting entity will be considered an agency as defined in 5 
U.S.C. 701 for the purpose of judicial review of the adverse action.


Sec.  96.80  [Reserved]

Subpart L--Oversight of Accredited Agencies and Approved Persons by 
the Secretary


Sec.  96.81  Scope.

    The provisions in this subpart establish the procedures governing 
adverse action by the Secretary against accredited agencies and 
approved persons. Temporary accreditation is governed by the provisions 
in subpart N of this part. Unless otherwise provided in subpart N of 
this part, the provisions in this subpart do not apply to temporarily 
accredited agencies.


Sec.  96.82  The Secretary's response to actions by the accrediting 
entity.

    (a) There is no administrative review by the Secretary of an 
accrediting entity's decision to deny accreditation or approval, nor of 
any decision by an accrediting entity to take an adverse action.
    (b) When informed by an accrediting entity that an agency has been 
accredited or a person has been approved, the Secretary will take 
appropriate steps to ensure that relevant information about the 
accredited agency or approved person is provided to the Permanent 
Bureau of the Hague Conference on Private International Law. When 
informed by an accrediting entity that it has taken an adverse action 
that impacts an agency's or person's accreditation or approval status, 
the Secretary will take appropriate steps to inform the Permanent 
Bureau of the Hague Conference on Private International Law.


Sec.  96.83  Suspension or cancellation of accreditation or approval by 
the Secretary.

    (a) The Secretary must suspend or cancel the accreditation or 
approval granted by an accrediting entity when the Secretary finds, in 
the Secretary's discretion, that the agency or person is substantially 
out of compliance with the standards in subpart F of this part and that 
the accrediting entity has failed or refused, after consultation with 
the Secretary, to take action.
    (b) The Secretary may suspend or cancel the accreditation or 
approval granted by an accrediting entity if the Secretary finds that 
such action:
    (1) Will protect the interests of children;
    (2) Will further U.S. foreign policy or national security 
interests; or
    (3) Will protect the ability of U.S. citizens to adopt children 
under the Convention.
    (c) If the Secretary suspends or cancels the accreditation or 
approval of an agency or person, the Secretary will take appropriate 
steps to notify both the accrediting entity and the Permanent Bureau of 
the Hague Conference on Private International Law.


Sec.  96.84  Reinstatement of accreditation or approval after 
suspension or cancellation by the Secretary.

    (a) An agency or person may petition the Secretary for relief from 
the Secretary's suspension or cancellation of its accreditation or 
approval on the grounds that the deficiencies necessitating the 
suspension or cancellation have been corrected. If the Secretary is 
satisfied that the deficiencies that led to the suspension or 
cancellation have been corrected, the Secretary shall, in the case of a 
suspension, terminate the suspension or, in the case of a cancellation, 
notify the agency or person that it may reapply for accreditation or 
approval to the same accrediting entity that handled its prior 
application for accreditation or approval. If that accrediting entity 
is no longer providing accreditation or approval services, the agency 
or person may reapply to any accrediting entity with jurisdiction over 
its application. If the Secretary terminates a suspension or permits an 
agency or person to reapply for accreditation or approval, the 
Secretary will so notify the appropriate accrediting entity. If the 
Secretary terminates a suspension, the Secretary will also take 
appropriate steps to notify the Permanent Bureau of the Hague 
Conference on Private International Law of the reinstatement.
    (b) Nothing in this section shall be construed to prevent the 
Secretary from withdrawing a cancellation or

[[Page 8157]]

suspension if the Secretary concludes that the action was based on a 
mistake of fact or was otherwise in error. Upon taking such action, the 
Secretary will take appropriate steps to notify the accrediting entity 
and the Permanent Bureau of the Hague Conference on Private 
International Law.


Sec.  96.85  Temporary and permanent debarment by the Secretary.

    (a) The Secretary may temporarily or permanently debar an agency 
from accreditation or a person from approval on the Secretary's own 
initiative, at the request of DHS, or at the request of an accrediting 
entity. A debarment of an accredited agency or approved person will 
automatically result in the cancellation of accreditation or approval 
by the Secretary, and the accrediting entity shall deny any pending 
request for renewal of accreditation or approval.
    (b) The Secretary may issue a debarment order only if the 
Secretary, in the Secretary's discretion, determines that:
    (1) There is substantial evidence that the agency or person is out 
of compliance with the standards in subpart F of this part; and
    (2) There has been a pattern of serious, willful, or grossly 
negligent failures to comply, or other aggravating circumstances 
indicating that continued accreditation or approval would not be in the 
best interests of the children and families concerned. For purposes of 
this paragraph:
    (i) ``The children and families concerned'' include any children 
and any families whose interests have been or may be affected by the 
agency's or person's actions;
    (ii) A failure to comply with Sec.  96.47 (home study requirements) 
shall constitute a ``serious failure to comply'' unless it is shown by 
clear and convincing evidence that such noncompliance had neither the 
purpose nor the effect of determining the outcome of a decision or 
proceeding by a court or other competent authority in the United States 
or the child's country of origin; and
    (iii) Repeated serious, willful, or grossly negligent failures to 
comply with Sec.  96.47 (home study requirements) by an agency or 
person after consultation between the Secretary and the accrediting 
entity with respect to previous noncompliance by such agency or person 
shall constitute a pattern of serious, willful, or grossly negligent 
failures to comply.


Sec.  96.86  Length of debarment period and reapplication after 
temporary debarment.

    (a) In the case of a temporary debarment order, the order will take 
effect on the date specified in the order and will specify a date, not 
earlier than three years later, on or after which the agency or person 
may petition the Secretary for withdrawal of the temporary debarment. 
If the Secretary withdraws the temporary debarment, the agency or 
person may then reapply for accreditation or approval to the same 
accrediting entity that handled its prior application for accreditation 
or approval. If that accrediting entity is no longer providing 
accreditation or approval services, the agency or person may apply to 
any accrediting entity with jurisdiction over its application.
    (b) In the case of a permanent debarment order, the order will take 
effect on the date specified in the order. The agency or person will 
not be permitted to apply again to an accrediting entity for 
accreditation or approval, or to the Secretary for termination of the 
debarment.
    (c) Nothing in this section shall be construed to prevent the 
Secretary from withdrawing a debarment if the Secretary concludes that 
the action was based on a mistake of fact or was otherwise in error. 
Upon taking such action, the Secretary will take appropriate steps to 
notify the accrediting entity and the Permanent Bureau of the Hague 
Conference on Private International Law.


Sec.  96.87  Responsibilities of the accredited agency, approved 
person, and accrediting entity following suspension, cancellation, or 
debarment by the Secretary.

    If the Secretary suspends or cancels the accreditation or approval 
of an agency or person, or debars an agency or person, the agency or 
person must cease to provide adoption services in all Convention cases. 
In the case of suspension, it must consult with the accrediting entity 
about whether to transfer its Convention adoption cases and adoption 
records. In the case of cancellation or debarment, it must execute the 
plans required by Sec. Sec.  96.33(e) and 96.42(d) under the oversight 
of the accrediting entity, and transfer its Convention adoption cases 
and adoption records to other accredited agencies, approved persons, or 
a State archive, as appropriate. When the agency or person is unable to 
transfer such Convention cases or adoption records in accordance with 
the plans or as otherwise agreed by the accrediting entity, the 
accrediting entity will so advise the Secretary who, with the 
assistance of the accrediting entity, will coordinate efforts to 
identify other accredited agencies or approved persons to assume 
responsibility for the cases, and to transfer the records to other 
accredited agencies or approved persons, or to public domestic 
authorities, as appropriate.


Sec.  96.88  Review of suspension, cancellation, or debarment by the 
Secretary.

    (a) Except to the extent provided by the procedures in Sec.  96.84, 
an adverse action by the Secretary shall not be subject to 
administrative review.
    (b) Section 204(d) of the IAA (42 U.S.C. 14924(d)) provides for 
judicial review of final actions by the Secretary. When any petition 
brought under section 204(d) raises as an issue whether the 
deficiencies necessitating a suspension or cancellation of 
accreditation or approval have been corrected, procedures maintained by 
the Secretary pursuant to Sec.  96.84(a) must first be exhausted. A 
suspension or cancellation of accreditation or approval, and a 
debarment (whether temporary or permanent) by the Secretary are final 
actions subject to judicial review. Other actions by the Secretary are 
not final actions and are not subject to judicial review.
    (c) In accordance with section 204(d) of the IAA (42 U.S.C. 
14924(d)), an agency or person that has been suspended, cancelled, or 
temporarily or permanently debarred by the Secretary may petition the 
United States District Court for the District of Columbia, or the 
United States district court in the judicial district in which the 
person resides or the agency is located, pursuant to 5 U.S.C. 706, to 
set aside the action.


Sec.  96.89  [Reserved]

Subpart M--Dissemination and Reporting of Information by 
Accrediting Entities


Sec.  96.90  Scope.

    The provisions in this subpart govern the dissemination and 
reporting of information on accredited agencies and approved persons by 
accrediting entities. Temporary accreditation is governed by the 
provisions of subpart N of this part and, as provided for in Sec.  
96.110, reports on temporarily accredited agencies must comply with 
this subpart.


Sec.  96.91  Dissemination of information to the public about 
accreditation and approval status.

    (a) Once the Convention has entered into force for the United 
States, the accrediting entity must maintain and make available to the 
public on a quarterly basis the following information:

[[Page 8158]]

    (1) The name, address, and contact information for each agency and 
person it has accredited or approved;
    (2) The names of agencies and persons to which it has denied 
accreditation or approval that have not subsequently been accredited or 
approved;
    (3) The names of agencies and persons that have been subject to 
withdrawal of temporary accreditation, suspension, cancellation, 
refusal to renew accreditation or approval, or debarment by the 
accrediting entity or the Secretary; and
    (4) Other information specifically authorized in writing by the 
accredited agency or approved person to be disclosed to the public.
    (b) Once the Convention has entered into force for the United 
States, each accrediting entity must make the following information 
available to individual members of the public upon specific request:
    (1) Confirmation of whether or not a specific agency or person has 
a pending application for accreditation or approval, and, if so, the 
date of the application and whether it is under active consideration or 
whether a decision on the application has been deferred; and
    (2) If an agency or person has been subject to a withdrawal of 
temporary accreditation, suspension, cancellation, refusal to renew 
accreditation or approval, or debarment, a brief statement of the 
reasons for the action.


Sec.  96.92  Dissemination of information to the public about 
complaints against accredited agencies and approved persons.

    Once the Convention has entered into force for the United States, 
each accrediting entity must maintain a written record documenting each 
complaint received and the steps taken in response to it. This 
information may be disclosed to the public as follows:
    (a) The accrediting entity must verify, upon inquiry from a member 
of the public, whether there have been any substantiated complaints 
against an accredited agency or approved person, and if so, provide 
information about the status and nature of any such complaints.
    (b) The accrediting entity must have procedures for disclosing 
information about complaints that are substantiated.


Sec.  96.93  Reports to the Secretary about accredited agencies and 
approved persons and their activities.

    (a) The accrediting entity must make annual reports to the 
Secretary on the information it collects from accredited agencies and 
approved persons pursuant to Sec.  96.43. The accrediting entity must 
make semi-annual reports to the Secretary that summarize for the 
preceding six-month period the following information:
    (1) The accreditation and approval status of applicants, accredited 
agencies, and approved persons;
    (2) Any instances where it has denied accreditation or approval;
    (3) Any adverse actions taken against an accredited agency or 
approved person and any withdrawals of temporary accreditation;
    (4) All substantiated complaints against accredited agencies and 
approved persons and the impact of such complaints on their 
accreditation or approval status;
    (5) The number, nature, and outcome of complaint investigations 
carried out by the accrediting entity as well as the shortest, longest, 
average, and median length of time expended to complete complaint 
investigations; and
    (6) Any discernible patterns in complaints received about specific 
agencies or persons, as well as any discernible patterns of complaints 
in the aggregate.
    (b) The accrediting entity must report to the Secretary within 
thirty days of the time it learns that an accredited agency or approved 
person:
    (1) Has ceased to provide adoption services; or
    (2) Has transferred its Convention cases and adoption records.
    (c) In addition to the reporting requirements contained in Sec.  
96.72, an accrediting entity must immediately notify the Secretary in 
writing:
    (1) When it accredits an agency or approves a person;
    (2) When it renews the accreditation or approval of an agency or 
person; or
    (3) When it takes an adverse action against an accredited agency or 
approved person that impacts its accreditation or approval status or 
withdraws an agency's temporary accreditation.


Sec.  96.94  [Reserved]

Subpart N--Procedures and Standards Relating to Temporary 
Accreditation


Sec.  96.95  Scope.

    (a) The provisions in this subpart govern only temporary 
accreditation. The provisions in subpart F of this part cover full 
accreditation of agencies and approval of persons.
    (b) Agencies that meet the eligibility requirements established in 
this subpart may apply for temporary accreditation that will run for a 
one-or two-year period following the Convention's entry into force for 
the United States. Persons may not be temporarily approved. Temporary 
accreditation is only available to agencies that apply by the 
transitional application deadline and who complete the temporary 
accreditation process by the deadline for initial accreditation or 
approval in accordance with Sec.  96.19.


Sec.  96.96  Eligibility requirements for temporary accreditation.

    (a) An accrediting entity may not temporarily accredit an agency 
unless the agency demonstrates to the satisfaction of the accrediting 
entity that:
    (1) It has provided adoption services in fewer than 100 
intercountry adoption cases in the calendar year preceding the year in 
which the transitional application deadline falls. For purposes of this 
subpart, the number of cases includes all intercountry adoption cases 
that were handled by, or under the responsibility of, the agency, 
regardless of whether they involved countries party to the Convention;
    (2) It qualifies for nonprofit tax treatment under section 
501(c)(3) of the Internal Revenue Code of 1986, as amended, or for 
nonprofit status under the law of any State;
    (3) It is properly licensed under State law to provide adoption 
services in at least one State. It is, and for the last three years 
prior to the transitional application deadline has been, providing 
intercountry adoption services;
    (4) It has the capacity to maintain and provide to the accrediting 
entity and the Secretary, within thirty days of request, all of the 
information relevant to the Secretary's reporting requirements under 
section 104 of the IAA (42 U.S.C. 14914); and
    (5) It has not been involved in any improper conduct related to the 
provision of intercountry adoption or other services, as evidenced in 
part by the following:
    (i) The agency has maintained its State license without suspension 
or cancellation for misconduct during the entire period in which it has 
provided intercountry adoption services;
    (ii) The agency has not been subject to a finding of fault or 
liability in any administrative or judicial action in the three years 
preceding the transitional application deadline; and
    (iii) The agency has not been the subject of any criminal findings 
of fraud or financial misconduct in the three years preceding the 
transitional application deadline.
    (b) An accrediting entity may not temporarily accredit an agency 
unless the agency also demonstrates to the

[[Page 8159]]

satisfaction of the accrediting entity that it has a comprehensive plan 
for applying for and achieving full accreditation before the agency's 
temporary accreditation expires, and is taking steps to execute that 
plan.


Sec.  96.97  Application procedures for temporary accreditation.

    (a) An agency seeking temporary accreditation must submit an 
application to an accrediting entity with jurisdiction over its 
application, with the required fee(s), by the transitional application 
deadline established pursuant to Sec.  96.19 of this part. Applications 
for temporary accreditation that are filed after the temporary 
application deadline will not be considered.
    (b) An agency may not seek temporary accreditation and full 
accreditation at the same time. The agency's application must clearly 
state whether it is seeking temporary accreditation or full 
accreditation. An eligible agency's option of applying for temporary 
accreditation will be deemed to have been waived if the agency also 
submits a separate application for full accreditation prior to the 
transitional application deadline. The agency may apply to only one 
accrediting entity at a time.
    (c) The accrediting entity must establish and follow uniform 
application procedures and must make information about these procedures 
available to agencies that are considering whether to apply for 
temporary accreditation. The accrediting entity must evaluate the 
applicant for temporary accreditation in a timely fashion. The 
accrediting entity must use its best efforts to provide a reasonable 
opportunity for an agency that applies for temporary accreditation by 
the transitional application deadline to complete the temporary 
accreditation process by the deadline for initial accreditation or 
approval. If an agency seeks temporary accreditation under this 
subpart, it will be included on the initial list deposited by the 
Secretary with the Permanent Bureau of the Hague Conference on Private 
International Law only if it is granted temporary accreditation by the 
deadline for initial accreditation or approval established pursuant to 
Sec.  96.19(a).


Sec.  96.98  Length of temporary accreditation period.

    (a) One-year temporary accreditation. An agency that has provided 
adoption services in 50-99 intercountry adoptions in the calendar year 
preceding the year in which the transitional application date falls may 
apply for a one-year period of temporary accreditation. The one-year 
period will commence on the date that the Convention enters into force 
for the United States.
    (b) Two-year temporary accreditation. An agency that has provided 
adoption services in fewer than 50 intercountry adoptions in the 
calendar year preceding the year in which the transitional application 
date falls may apply for a two-year period of temporary accreditation. 
The two-year period will commence on the date that the Convention 
enters into force for the United States.


Sec.  96.99  Converting an application for temporary accreditation to 
an application for full accreditation.

    (a) The accrediting entity may, in its discretion, permit an agency 
that has applied for temporary accreditation to convert its application 
to an application for full accreditation, subject to submission of any 
additional required documentation, information, and fee(s). The 
accrediting entity may grant a request for conversion if the 
accrediting entity has determined that the applicant is not in fact 
eligible for temporary accreditation based on the number of adoption 
cases it has handled; if the agency has concluded that it can complete 
the full accreditation process sooner than expected; or for any other 
reason that the accrediting entity deems appropriate.
    (b) If an application is converted after the transitional 
application deadline, it will be treated as an application filed after 
the transitional application deadline, and the agency may not 
necessarily be provided an opportunity to complete the accreditation 
process in time to be included on the initial list of accredited 
agencies and approved persons that the Secretary will deposit with the 
Permanent Bureau of the Hague Conference on Private International Law.


Sec.  96.100  Procedures for evaluating applicants for temporary 
accreditation.

    (a) To evaluate an agency for temporary accreditation, the 
accrediting entity must:
    (1) Review the agency's written application and supporting 
documentation; and
    (2) Verify the information provided by the agency, as appropriate. 
The accrediting entity may also request additional documentation and 
information from the agency in support of the application as it deems 
necessary.
    (b) The accrediting entity may also decide, in its discretion, that 
it must conduct a site visit to determine whether to approve the 
application for temporary accreditation. The site visit may include 
interviews with birth parents, adoptive parent(s), prospective adoptive 
parent(s), and adult adoptee(s) served by the agency, interviews with 
the agency's employees, and interviews with other individual(s) 
knowledgeable about its provision of adoption services. It may also 
include a review of on-site documents. The accrediting entity must, to 
the extent possible, advise the agency in advance of documents it 
wishes to review during the site visit. The provisions of Sec. Sec.  
96.25 and 96.26 will govern requests for and use of information.
    (c) Before deciding whether to grant temporary accreditation to the 
agency, the accrediting entity may, in its discretion, advise the 
agency of any deficiencies that may hinder or prevent its temporary 
accreditation and defer a decision to allow the agency to correct the 
deficiencies.
    (d) The accrediting entity may only use the criteria contained in 
Sec.  96.96 when determining whether an agency is eligible for 
temporary accreditation.
    (e) The eligibility criteria contained in Sec.  96.96 and the 
standards contained in Sec.  96.104 do not eliminate the need for an 
agency to comply fully with the laws of the jurisdictions in which it 
operates. An agency must provide adoption services in Convention cases 
consistent with the laws of any State in which it operates and with the 
Convention and the IAA.


Sec.  96.101  Notification of temporary accreditation decisions.

    (a) The accrediting entity must notify agencies of its temporary 
accreditation decisions on the uniform notification date to be 
established by the Secretary pursuant to Sec.  96.58(a). On that date, 
the accrediting entity must inform each applicant and the Secretary in 
writing whether the agency has been granted temporary accreditation. 
The accrediting entity may not provide any information about its 
temporary accreditation decisions to any agency or to the public until 
the uniform notification date. If the Secretary requests information on 
the interim or final status of an agency prior to the uniform 
notification date, the accrediting entity must provide such information 
to the Secretary.
    (b) Notwithstanding paragraph (a) of this section, the accrediting 
entity may, in its discretion, communicate with agencies about the 
status of their pending applications for temporary accreditation for 
the sole purpose of affording them an opportunity to correct 
deficiencies that may hinder their

[[Page 8160]]

temporary accreditation. When informed by an accrediting entity that an 
agency has been temporarily accredited, the Secretary will take 
appropriate steps to ensure that relevant information about a 
temporarily accredited agency is provided to the Permanent Bureau of 
the Hague Conference on Private International Law.


Sec.  96.102  Review of temporary accreditation decisions.

    There is no administrative or judicial review of an accrediting 
entity's decision to deny temporary accreditation.


Sec.  96.103  Oversight by accrediting entities.

    (a) The accrediting entity must oversee an agency that it has 
temporarily accredited by monitoring whether the agency is in 
substantial compliance with the standards contained in Sec.  96.104 and 
through the process of assessing the agency's application for full 
accreditation when it is filed. The accrediting entity must also 
investigate any complaints or other information that becomes available 
to it about an agency it has temporarily accredited. Complaints against 
a temporarily accredited agency must be handled in accordance with 
subpart J of this part. For purposes of subpart J of this part, the 
temporarily accredited agency will be treated as if it were a fully 
accredited agency, except that:
    (1) The relevant standards will be those contained in Sec.  96.104 
rather than those contained in subpart F of this part; and
    (2) Enforcement action against the agency will be taken in 
accordance with Sec.  96.105 and Sec.  96.107 rather than in accordance 
with subpart K of this part.
    (b) The accrediting entity may determine, in its discretion, that 
it must conduct a site visit to investigate a complaint or other 
information or otherwise monitor the agency.
    (c) The accrediting entity may consider any information that 
becomes available to it about the compliance of the agency. The 
provisions of Sec. Sec.  96.25 and 96.26 govern requests for and use of 
information.


Sec.  96.104  Performance standards for temporary accreditation.

    The accrediting entity may not maintain an agency's temporary 
accreditation unless the agency demonstrates to the satisfaction of the 
accrediting entity that it is in substantial compliance with the 
following standards:
    (a) The agency follows applicable licensing and regulatory 
requirements in all jurisdictions in which it provides adoption 
services;
    (b) It does not engage in any improper conduct related to the 
provision of intercountry adoption services, as evidenced in part by 
the following:
    (1) It maintains its State license without suspension or 
cancellation for misconduct;
    (2) It is not subject to a finding of fault or liability in any 
administrative or judicial action; and
    (3) It is not the subject of any criminal findings of fraud or 
financial misconduct;
    (c) It adheres to the standards in Sec.  96.36 prohibiting child 
buying;
    (d) It adheres to the standards for responding to complaints in 
accordance with Sec.  96.41;
    (e) It adheres to the standards on adoption records and information 
relating to Convention cases in accordance with Sec.  96.42;
    (f) It adheres to the standards on providing data to the 
accrediting entity in accordance with Sec.  96.43;
    (g) When acting as the primary provider in a Convention adoption it 
complies with the standards in Sec. Sec.  96.44 and 96.45 when using 
supervised providers in the United States and it complies with the 
standards in Sec. Sec.  96.44 and 96.46 when using supervised providers 
or, to the extent permitted by Sec.  96.14(c), other foreign providers 
in a Convention country;
    (h) When performing or approving a home study in an incoming 
Convention case, it complies with the standards in Sec.  96.47;
    (i) When performing or approving a child background study or 
obtaining consents in an outgoing Convention case, it complies with the 
standards in Sec.  96.53;
    (j) When performing Convention functions in incoming or outgoing 
cases, it complies with the standards in Sec.  96.52 or Sec.  96.55;
    (k) It has a plan to transfer its Convention cases and adoption 
records if it ceases to provide or is no longer permitted to provide 
adoption services in Convention cases. The plan includes provisions for 
an organized closure and reimbursement to clients of funds paid for 
services not yet rendered;
    (l) It is making continual progress toward completing the process 
of obtaining full accreditation by the time its temporary accreditation 
expires; and
    (m) It takes all necessary and appropriate measures to perform any 
tasks in a Convention adoption case that the Secretary identifies are 
required to comply with the Convention, the IAA, or any regulations 
implementing the IAA.


Sec.  96.105  Adverse action against a temporarily accredited agency by 
an accrediting entity.

    (a) If the accrediting entity determines that an agency it has 
temporarily accredited is substantially out of compliance with the 
standards in Sec.  96.104, it may, in its discretion, withdraw the 
agency's temporary accreditation.
    (b) The accrediting entity must notify the agency in writing of any 
decision to withdraw the agency's temporary accreditation. The written 
notice must identify the deficiencies necessitating the withdrawal. 
Before withdrawing the agency's temporary accreditation, the 
accrediting entity may, in its discretion, advise a temporarily 
accredited agency in writing of any deficiencies in its performance 
that may warrant withdrawal and provide it with an opportunity to 
demonstrate that withdrawal would be unwarranted before withdrawal 
occurs. If the accrediting entity withdraws the agency's temporary 
accreditation without such prior notice, it must provide a similar 
opportunity to demonstrate that the withdrawal was unwarranted after 
the withdrawal occurs, and may reinstate the agency's temporary 
accreditation based on the information provided.
    (c) The provisions of Sec. Sec.  96.25 and 96.26 govern requests 
for and use of information.
    (d) The accrediting entity must notify the Secretary, in accordance 
with procedures established in its agreement with the Secretary, when 
it withdraws or reinstates an agency's temporary accreditation. The 
accrediting entity must also notify the relevant State licensing 
authority as provided in the agreement.


Sec.  96.106  Review of the withdrawal of temporary accreditation by an 
accrediting entity.

    (a) A decision by an accrediting entity to withdraw an agency's 
temporary accreditation shall not be subject to administrative review.
    (b) Withdrawal of temporary accreditation is analogous to 
cancellation of accreditation and is therefore an adverse action 
pursuant to Sec.  96.75. In accordance with section 202(c)(3) of the 
IAA (42 U.S.C. 14922(c)(3)), a temporarily accredited agency that is 
the subject of an adverse action by an accrediting entity may petition 
the United States district court in the judicial district in which the 
agency is located to set aside the adverse action imposed by the 
accrediting entity. The United States district court shall review the 
adverse

[[Page 8161]]

action in accordance with 5 U.S.C. 706. When a temporarily accredited 
agency petitions a United States district court to review the adverse 
action of an accrediting entity, the accrediting entity will be 
considered an agency as defined in 5 U.S.C. 701 for the purpose of 
judicial review of the adverse action.


Sec.  96.107  Adverse action against a temporarily accredited agency by 
the Secretary.

    (a) The Secretary may, in the Secretary's discretion, withdraw an 
agency's temporary accreditation if the Secretary finds that the agency 
is substantially out of compliance with the standards in Sec.  96.104 
and the accrediting entity has failed or refused, after consultation 
with the Secretary, to take appropriate enforcement action.
    (b) The Secretary may also withdraw an agency's temporary 
accreditation if the Secretary finds that such action;
    (1) Will protect the interests of children;
    (2) Will further U.S. foreign policy or national security 
interests; or
    (3) Will protect the ability of U.S. citizens to adopt children 
under the Convention.
    (c) If the Secretary withdraws an agency's temporary accreditation, 
the Secretary will notify the accrediting entity.


Sec.  96.108  Review of the withdrawal of temporary accreditation by 
the Secretary.

    (a) There is no administrative review of a decision by the 
Secretary to withdraw an agency's temporary accreditation.
    (b) Section 204(d) of the IAA (42 U.S.C. 14924(d)) provides for 
judicial review of final actions by the Secretary. Withdrawal of 
temporary accreditation, which is analogous to cancellation of 
accreditation, is a final action subject to judicial review.
    (c) An agency whose temporary accreditation has been withdrawn by 
the Secretary may petition the United States District Court for the 
District of Columbia, or the United States district court in the 
judicial district in which the agency is located, to set aside the 
action pursuant to section 204(d) of the IAA (42 U.S.C. 14924(d)).


Sec.  96.109  Effect of the withdrawal of temporary accreditation by 
the accrediting entity or the Secretary.

    (a) If an agency's temporary accreditation is withdrawn, it must 
cease to provide adoption services in all Convention cases and must 
execute the plan required by Sec.  96.104(k) under the oversight of the 
accrediting entity, and transfer its Convention adoption cases and 
adoption records to an accredited agency, approved person, or a State 
archive, as appropriate.
    (b) Where the agency is unable to transfer such Convention cases or 
adoption records in accordance with the plan or as otherwise agreed by 
the accrediting entity, the accrediting entity will so advise the 
Secretary who, with the assistance of the accrediting entity, will 
coordinate efforts to identify other accredited agencies or approved 
persons to assume responsibility for the cases, and to transfer the 
records to other accredited agencies or approved persons, or to public 
domestic authorities, as appropriate.
    (c) When an agency's temporary accreditation is withdrawn or 
reinstated, the Secretary will, where appropriate, take steps to inform 
the Permanent Bureau of the Hague Conference on Private International 
Law.
    (d) An agency whose temporary accreditation has been withdrawn may 
continue to seek full accreditation or may withdraw its pending 
application and apply for full accreditation at a later time. Its 
application for full accreditation must be made to the same accrediting 
entity that granted its application for temporary accreditation. If 
that entity is no longer providing accreditation services, it may apply 
to any accrediting entity with jurisdiction over its application.
    (e) If an agency continues to pursue its application for full 
accreditation or subsequently applies for full accreditation, the 
accrediting entity may take the circumstances of the withdrawal of its 
temporary accreditation into account when evaluating the agency for 
full accreditation.


Sec.  96.110  Dissemination and reporting of information about 
temporarily accredited agencies.

    The accrediting entity must disseminate and report information 
about agencies it has temporarily accredited as if they were fully 
accredited agencies, in accordance with subpart M of this part.


Sec.  96.111  Fees charged for temporary accreditation.

    (a) Any fees charged by an accrediting entity for temporary 
accreditation will include a non-refundable fee for temporary 
accreditation set forth in a schedule of fees approved by the Secretary 
as provided in Sec.  96.8(a). Such fees may not exceed the costs of 
temporary accreditation and must include the costs of all activities 
associated with the temporary accreditation cycle (including, but not 
limited to, costs for completing the temporary accreditation process, 
complaint review and investigation, routine oversight and enforcement, 
and other data collection and reporting activities). The temporary 
accreditation fee may not include the costs of site visit(s). The 
schedule of fees may provide, however, that, in the event that a site 
visit is required to determine whether to approve an application for 
temporary accreditation, to investigate a complaint or other 
information, or otherwise to monitor the agency, the accrediting entity 
may assess additional fees for actual costs incurred for travel and 
maintenance of evaluators and for any additional administrative costs 
to the accrediting entity. In such a case, the accrediting entity may 
estimate the additional fees and may require that the estimated amount 
be paid in advance, subject to a refund of any overcharge. Temporary 
accreditation may be denied or withdrawn if the estimated fees are not 
paid.
    (b) An accrediting entity must make its schedule of fees available 
to the public, including prospective applicants for temporary 
accreditation, upon request. At the time of application, the 
accrediting entity must specify the fees to be charged in a contract 
between the parties and must provide notice to the applicant that no 
portion of the fee will be refunded if the applicant fails to become 
temporarily accredited.

    Dated: January 13, 2006.
Maura Harty,
Assistant Secretary for Consular Affairs, Department of State.
[FR Doc. 06-1067 Filed 2-14-06; 8:45 am]
BILLING CODE 4710-06-P