[Federal Register Volume 75, Number 225 (Tuesday, November 23, 2010)]
[Proposed Rules]
[Pages 71376-71378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29482]
[[Page 71376]]
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DEPARTMENT OF COMMERCE
Bureau of Industry and Security
15 CFR Part 748
[Docket No. 100826397-0346-02]
RIN 0694-AE98
Simplified Network Application Processing System, On-Line
Registration and Account Maintenance
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Industry and Security (BIS) is proposing to
implement an on-line registration process for obtaining an account to
submit license applications and similar documents electronically. The
current registration process requires paper and facsimile submissions.
This proposed rule sets forth the information that parties registering
on-line would be required to provide to BIS and sets forth the duties
that registered parties would have with respect to keeping information
in their accounts current.
DATES: Comments must be received by BIS no later than January 24, 2011.
ADDRESSES: Comments may be submitted via to any of the following.
The Federal e-rulemaking portal, regulations.gov. The
regulations.gov docket number for this rule is: BIS-2010-0037.
Via e-mail at [email protected]--refer to RIN
0694-AE98 in the subject line.
Mail or delivery to Regulatory Policy Division, Room 2705,
Bureau of Industry and Security, U.S. Department of Commerce,
Washington, DC 20230--refer to RIN 0694-AE98 in the comment.
FOR FURTHER INFORMATION CONTACT: Thomas W. Andrukonis, Director, Export
Management and Compliance Division, Office of Exporter Services,
telephone 202.482.6393, e-mail [email protected].
SUPPLEMENTARY INFORMATION:
Background
BIS administers an export licensing program pursuant to the Export
Administration Regulations. In connection with this program, BIS
requires most parties to submit license applications, classification
requests, encryption registrations, License Exception AGR notifications
and foreign national review requests in connection with the License
Exceptions APP and CIV (herein ``work items'') electronically via BIS's
Simplified Network Application Processing (SNAP-R) system. Currently,
parties must register to use that system via a paper- or facsimile-
based process. BIS plans to replace that registration process with one
that is exclusively on-line.
Organizations or individuals who submit work items would be
referred to as ``filing entities.'' Individuals who act on behalf of
filing entities would be known as ``individual users.'' For each filing
entity, at least one individual user would act as an ``account
administrator.'' An account administrator would be able to submit work
items on behalf of his or her filing entity and would have additional
responsibilities within the on-line registration system.
An account administrator would have the ability to add and remove
individual users to or from the account of his or her filing entity.
The account administrator would also be able to designate other
individual users who are authorized to act on behalf of the same filing
entity as account administrators or to terminate an individual user's
account administrator status. The account administrator would be able
to deactivate the account of an individual user and reactivate the
account of a previously deactivated individual user. The account
administrator would be able to update the filing entity's identifying
information such as name and address and any individual user's
identifying information such as name and telephone number. The account
administrator would also be able to reset an individual user's
password.
BIS anticipates that once this system is in place, the current
processes in which BIS employees create on-line accounts for filing
entities and add or remove new individual users to or from a filing
entity's account in response to written or facsimile communications
would cease. Account administrators for filing entities would handle
routine changes to the filing entities' accounts and BIS personnel
would become involved only if necessary to protect a government
interest such as preventing misuse of the SNAP-R system or if necessary
to assist someone attempting to register on-line or administer an
account.
BIS intends to begin operating the on-line registration system on
the date of publication of the final rule, but proposes to phase in
mandatory use of on-line registration and account management according
to the following schedule.
New Filing Entities
On the effective date of the final rule and for 30 days thereafter,
an individual registering a filing entity that does not currently have
a SNAP-R account would be able to use either the existing paper- and
facsimile-based process or the new on-line registration process
described in the following paragraph. Beginning 31 days after the
effective date of the final rule, the on-line registration process
would be mandatory for all new registrants.
Requirement To Designate an Account Administrator at the Time of
Electronic Registration
A person registering on-line for a filing entity that does not have
a SNAP-R account, will be required to enter all of the identifying
information for the filing entity including a certification that the
person is authorized to register the filing entity and to act as
account administrator for the filing entity as well as his or her own
identifying information. That person will become the initial account
administrator for that filing entity.
Deadlines for Designating an Account Administrator If the Filing Entity
Was Not Registered Electronically
Filing entities that are registered to use SNAP-R on the effective
date of the final rule and filing entities that elect to use the paper
and facsimile based process during the first 30 days following the
effective date of the final rule would be required to designate an
account administrator as described below.
On the effective date of the final rule and for 90 days thereafter,
any individual user who is authorized to submit work items on behalf of
a filing entity would be able to continue to access SNAP-R, submit new
work items and perform any necessary tasks in connection with pending
work items. In addition, the first such individual user who designates
himself or herself as the account administrator would be required to
certify that he or she is authorized to act as account administrator
and would become the initial account administrator. BIS would inform
via e-mail all other individual users who are authorized to act for
that filing entity of the identity of the newly designated account
administrator.
During the period beginning 91 days after the effective date of the
final rule and ending 180 days after the effective date of the final
rule, no individual user from a filing entity that does not have at
least one account administrator would be able to access the SNAP-R
system for any purpose other than to designate himself or herself as
account administrator for that filing entity and certify that he or she
is authorized to act as account administrator. As soon as
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one individual user is designated as the account administrator, that
individual user as well as all of the other individual users from that
filing entity will regain full SNAP-R access.
Beginning 181 days after the effective date of the final rule, all
filing entity accounts for which no account administrator has been
designated would become inactive. To use the account for any purpose,
an individual would have to log on to the SNAP-R Web site and furnish
all of the information that would be required to register a new filing
entity.
Rulemaking Requirements
1. This rule has been determined to be not significant for purposes
of E.O. 12866.
2. Notwithstanding any other provision of law, no person is
required to respond to, nor is subject to a penalty for failure to
comply with, a collection of information, subject to the requirements
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This regulation contains
a collection previously approved by OMB under control number 0694-0096.
BIS believes that this rule will not materially affect the burden
imposed by that collection. Send comments regarding these burden
estimates or any other aspect of these collections of information,
including suggestions for reducing the burden, to Jasmeet Seehra,
Office of Management and Budget (OMB), by e-mail to
[email protected], or by fax to (202) 395-7285; and to the Regulatory
Policy Division, Bureau of Industry and Security, Department of
Commerce, Room 2705, 14th Street, and Pennsylvania Ave., NW.,
Washington, DC 20230.
3. This rule does not contain policies with Federalism implications
as that term is defined under E.O. 13132.
4. The Chief Counsel for Regulation of the Department of Commerce
has certified to the Chief Counsel for Advocacy of the Small Business
Administration that this proposed rule, if adopted in final form, would
not have a significant economic impact on a substantial number of small
entities.
Economic Impact
BIS believes that this rule will reduce the burden on small
entities. This rule will eliminate the current and archaic practice of
using a paper and facsimile based process for obtaining authorization
to submit work items electronically. It will also reduce the time
between initial submission of registration information and receipt of
authorization to use the electronic filing system. Finally, the system
will allow registered filing entities to add or remove individual users
without waiting for approval from BIS.
BIS implemented a revised version of its Simplified Network
Applications Processing System (SNAP-R) in October 2006. The SNAP-R
system provides a Web based mechanism for parties to submit license
applications, classification requests, encryption registrations,
License Exception AGR notifications and foreign national review
requests in connection with License Exceptions APP and CIV
electronically and for BIS to respond electronically to each matter. In
October 2008, BIS made use of the SNAP-R system mandatory except in
five specified circumstances. SNAP-R is the vehicle through which BIS
receives most of the submissions for which SNAP-R is available. In
calendar year 2009, BIS received 27,245 submissions via SNAP-R and 55
submissions via paper. On-line processing provides advantages to the
government and to the parties submitting work items through reduced
processing times.
Despite these advantages, BIS still requires parties registering to
use the SNAP-R on-line system and those who need to make changes to
their accounts to use paper or facsimile transmissions to do so. A
party wishing to register now obtains a description of the identifying
information that the party must submit and the text of a certification
that the party must make from the BIS Web site. The party copies the
information onto its letterhead and sends or faxes the paper document
to BIS. BIS personnel then assign a company identification number to
the filing entity and a personal identification number to each
individual user identified on the submission and communicate those
numbers to the appropriate representative of the filing entity and to
each individual user. A separate letter must be sent or faxed to BIS
each time a new individual user needs to be authorized to file on
behalf of the filing entity and BIS personnel issue a new personal
identification number to that person via telephone or e-mail. Finally,
a letter must be sent to BIS when an individual user no longer is
authorized to submit work items on behalf of the filing entity. BIS
personnel then deactivate that individual user's account.
Under the procedure envisioned by this proposed rule, a potential
individual user, representing a filing entity would access a Web page
where he or she would enter the necessary identifying information about
himself or herself and about the filing entity which that person
represents. That individual would also certify on-line that he or she
is authorized to register the filing entity and to act as account
administrator for the filing entity. That individual would receive both
the company identification number and his or her personal
identification number via e-mail. Upon receipt of those numbers, that
individual user could submit work items on behalf of the filing entity.
He or she could also register new individual users for the filing
entity. Once registered, each such new individual user could log on and
begin submitting work items.
The process will be entirely Web based and will not require users
to purchase hardware or software. Parties who do not have access to the
Internet would not be affected by this rule because they are exempt
from the requirement to submit work items electronically and thus would
not need to register to use SNAP-R.
Number of Small Entities
BIS does not collect information about the size of the entities
that submit license applications, classification requests, and related
submissions via the SNAP-R system. In 2007, BIS made an attempt to
estimate the number of small entities that would be affected by the
rule requiring electronic submissions by the following method.
BIS determined that 1,592 entities sent in two or more submissions
in 2006 (entities that make no more than one submission per year are
exempt from the electronic filing requirement). By reviewing public
information BIS determined that 252 of these entities could not
possibly be small entities because they had more than $100 million in
annual sales, had more than 5,000 employees or because they were United
States government agencies. BIS did not have a basis for determining
whether the remaining 1340 entities were small entities.
Because many industries may be involved in exporting, BIS could not
directly relate its data to the ``Small Business Size Standards Matched
to North American Industry Classification System'' (the Standards
Table) published by the Small Business Administration (SBA). However,
BIS notes that the November 5, 2010, Standards Table designates
business as small based on either sales or number of employees,
depending on the industry. The maximum annual sales and maximum number
of employees listed in that document are $35.5 million and
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1,500, respectively. Both numbers are far below the threshold selected
by BIS for screening entries as to size. A few entries in the Standards
Table are based on having no more than million in assets, but these
entries are financial institutions that are unlikely to be exporting
the kinds of items that require a specific authorization from BIS.
Moreover, most of the categories in the Standards Table for which
the sales limit is relatively high are unlikely to be affected by this
rule because they are unlikely to engage in export or reexport
transactions that require specific authorization from BIS. Examples of
small entities at the higher end of the sales range of the Standards
Table include: Family Clothing Stores, Food Service Contractors and
Home Centers--$35.5 million each, Forest Fire Suppression--$17.5
million, New Single-Family Housing Construction Contractors--$33.5
million and Gasoline Stations with Convenience Stores--$27.0 million.
Conclusion
Based on the information that it does know, BIS believes that most
categories of small entities identified by the Small Business
Administration are unlikely to be engaged in the kinds of transactions
that require specific authorization from BIS and thus would be unlikely
to use BIS's SNAP-R system. The exemption from the electronic filing
requirement that BIS's rules provide for parties making no more than
one submission per year and parties that lack access to the Internet
tend to further exclude small entities from the impact of this rule.
Significantly, the effect of this rule on all affected entities is
likely to be a reduction in burden because this rule allows
implementation of an electronic registration procedure for an existing
electronic document filing system. In doing so, it replaces an existing
paper based registration system, allowing parties who need to submit
documents to BIS to register to do so in less time. Existing provisions
of the Export Administration Regulations require most parties to submit
work items electronically. This rule would not change that requirement
nor would it change any exceptions to that requirement. Parties who
qualify and who wish to submit work items on paper would not be subject
to the registration requirement of this rule. However, those who either
are required or choose to submit their work items electronically would
no longer be subjected to a paper based registration process before
they can begin electronic submissions. In addition, once registered
with an account administration in place, filing entities would no
longer have to submit information to BIS via paper or facsimile and
wait for a response from BIS in order to add or remove individual users
or to update identifying information.
List of Subjects in 15 CFR Part 748
Administrative practice and procedure, Exports, Reporting and
recordkeeping requirements.
Accordingly, the Export Administration Regulations (15 CFR Parts
730-774) are proposed to be amended as follows:
1. The authority citation for part 748 continues to read as
follows:
Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;
E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66
FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 12, 2010, 75
FR 50681 (August 16, 2010).
2. Section 748.7 is revised to read as follows:
Sec. 748.7 Registering for electronic submission of license
applications and related documents.
(a) Scope. This section describes the procedures for registering to
submit electronic documents to BIS. The procedures in this section
apply to submission of export and reexport license applications (other
than Special Comprehensive Licenses and Special Iraq Reconstruction
Licenses), classification requests, encryption registrations, License
Exception AGR notifications and foreign national review requests under
License Exceptions APP or CIV.
(b) Registration and Use of BIS's Simplified Network Applications
System--Redesign (SNAP-R). Parties wishing to submit electronically
must log on to [URL to be determined] to register. Upon initial
registration, the party (the filing entity) will have to supply the
name of the entity that will be submitting documents electronically and
its address and the name, telephone number, facsimile number and e-mail
address of the person who will act as account administrator. The person
will be required to certify that the information so supplied is correct
and complete, that the person has authority to register the entity that
will be making electronic submissions and that the person has authority
to act as an account administrator for that entity.
(c) Role of account administrator. The account administrator is
able to add and remove individual users to and from the account of the
filing entity for which it is the account administrator. The account
administrator can also make individual users account administrators and
can terminate an individual user's administrator status. The account
administrator can deactivate the account of an individual user and
reactivate the account of a previously deactivated individual user. The
account administrator can update the filing entity's identifying
information such as name and address and any individual user's
identifying information such as name, telephone number, facsimile
number and e-mail address. The account administrator can reset
individual users' passwords.
(d) Role of individual users. An individual user may submit to BIS
export and reexport license applications (other than Special
Comprehensive Licenses and Special Iraq Reconstruction Licenses),
classification requests, encryption registrations, License Exception
AGR notifications and foreign national review requests under License
Exceptions APP or CIV.
(e) Effect of submission to BIS. BIS may refuse to accept an
electronic submission if it has reason to believe that the individual
user making the submission lacks authority to do so. However, BIS is
not obligated to conduct any checks to determine whether an individual
user has the necessary authority and will generally treat users as
acting within their authority. Acting through their account
administrators, parties have the ability to remove an individual user
when that individual user is no longer authorized to make submissions
on behalf of that party to BIS and should do so promptly.
(f) Requirement to keep identifying information accurate and
current--(1) Filing entities. Filing entities must, through their
account administrators, update their identifying information such as
name, address and telephone number in their SNAP-R account as necessary
to keep that information accurate and current.
(2) Individual users. Individual users must, through their account
administrators, update their identifying information such as name,
telephone number, facsimile number and e-mail address in their SNAP-R
accounts as necessary to keep that information accurate and current.
Dated: November 15, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-29482 Filed 11-22-10; 8:45 am]
BILLING CODE 3510-33-P