[Federal Register Volume 76, Number 151 (Friday, August 5, 2011)]
[Proposed Rules]
[Pages 47527-47529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19947]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Chapter VII

[Docket No. 110711380-1379-01]
RIN 0694-XA37


Retrospective Regulatory Review Under E.O. 13563

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Notice of inquiry.

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SUMMARY: The Bureau of Industry and Security (BIS), Department of 
Commerce, is currently engaged in the Export Control Reform Initiative, 
which will fundamentally reform the U.S. export control system. 
Retrospective review of the regulations administered by BIS is an 
essential aspect of the Export Control Reform Initiative. In addition 
to this effort, and pursuant to President Obama's direction in 
Executive Order 13563, BIS is conducting a retrospective review of 
portions of the Export Administration Regulations, Chemical Weapons 
Convention Regulations, Additional Protocol Regulations, and National 
Defense Industrial Base Regulations to determine how they might be 
clarified or streamlined to be more effective or less burdensome. 
Through this notice of inquiry, BIS seeks public comments on how it 
should undertake its retrospective review of regulations.

DATES: Comments must be received by BIS no later than February 1, 2012.

ADDRESSES: Comments may be submitted to the Federal rulemaking portal 
(http://www.regulations.gov). The regulations.gov ID for this notice of 
inquiry is: BIS-2011-0027. In order to maximize the open exchange of 
ideas, BIS strongly encourages comment submission through 
regulations.gov. However, comments may also be submitted via e-mail to 
[email protected] or on paper to Regulatory Policy Division, 
Bureau of Industry and Security, Room 2099B, U.S. Department of 
Commerce, Washington, DC 20230. Please refer to RIN 0694-XA37 in all 
comments and in the subject line of e-mail comments. All comments 
(including any personally identifying information) will be made 
available for public inspection and copying.

FOR FURTHER INFORMATION CONTACT: Hillary Hess, Director, Regulatory 
Policy Division, Office of Exporter Services, Bureau of Industry and 
Security at 202-482-2440 or [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 13563

    On January 18, 2011, President Barack Obama issued Executive Order 
13563, affirming general principles of regulation and directing 
government agencies to improve regulation and regulatory review. Among 
other things, the President stressed the need for the regulatory system 
to allow for public participation and an open exchange of ideas, as 
well as promote predictability and reduce uncertainty. The President 
also emphasized that regulations must be accessible, consistent, 
written in plain language, and easy to understand. As part of its 
ongoing effort to ensure that its regulations are clear, effective, and 
up-to-date, BIS is issuing this notice of inquiry soliciting public 
comments on its existing and proposed rules, with the exception of 
those rules related to the Export Control Reform Initiative, as 
described below. BIS requests that comments on rules related to export 
control reform be submitted in response to those specific rules and 
notices rather than to this broader notice of inquiry, which pertains 
to other aspects of the Export Administration Regulations and to the 
Chemical Weapons Convention Regulations, the Additional Protocol 
Regulations, and National Security Industrial Base Regulations.

The Export Control Reform Initiative

    In August 2009, the President directed a broad-based interagency 
review of the U.S. export control system with the goal

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of strengthening national security and the competitiveness of key U.S. 
manufacturing and technology sectors by focusing on current threats and 
adapting to the changing economic and technological landscape. The 
review determined that the current export control system is overly 
complicated, contains too many redundancies, and, in trying to protect 
too much, diminishes our ability to focus our efforts on the most 
critical national security priorities. As a result, the Administration 
began the Export Control Reform Initiative, which will fundamentally 
reform the U.S. export control system. The Export Control Reform 
Initiative is designed to enhance U.S. national security and strengthen 
the United States' ability to counter threats such as the proliferation 
of weapons of mass destruction. The Administration determined that 
fundamental reform is needed in each of the export control system's 
four component areas: transformation to a single control list, a single 
licensing agency, a single information technology system, and a single 
primary enforcement coordination agency. The Administration is 
implementing the reform in three phases. The first two phases involve 
short- and medium-term adjustments to the current export control 
system, with a focus on establishing harmonized control lists and 
processes among the Departments of Commerce, State, and the Treasury, 
to the extent practicable, in order to build toward the third phase of 
the single control list, licensing agency, information technology 
system, and enforcement coordination agency. Under this approach, new 
criteria for determining what items need to be controlled and a common 
set of policies for determining when an export license is required will 
be implemented. The control list criteria will be based on transparent 
rules, which will reduce the uncertainty faced by our allies, U.S. 
industry, and its foreign partners, and will allow the government to 
erect higher walls around the most sensitive items in order to enhance 
national security.
    On December 9, 2010, BIS issued a proposed rule (75 FR 76653) 
describing the proposed new License Exception Strategic Trade 
Authorization (STA) that will be an initial step in the Export Control 
Reform Initiative. License Exception STA will authorize, with 
conditions, the export, reexport and transfer (in-country) of specified 
items to destinations that pose relatively low risk of unauthorized 
uses. To safeguard against reexports to destinations that are not 
authorized under License Exception STA, it will impose notification and 
consignee statement requirements on these transactions. Also on 
December 9, BIS issued an Advance Notice of Proposed Rulemaking (75 FR 
76664) soliciting public comments on how the descriptions of items on 
the Commerce Control List (CCL) could be clarified and made more 
``positive'' in the sense of using objective parameters rather than 
subjective criteria to determine the items' classifications, which in 
turn determine license requirements. This notice also sought public 
comments on ``tiering'' items in a manner consistent with the control 
criteria the Administration has developed as part of the reform effort: 
The degree to which an item provides the United States with a critical, 
substantial, or significant military or intelligence advantage; and the 
availability of that item outside certain groups of countries. The 
Department of State's Directorate of Defense Trade Controls published 
requests for comment on revisions to the U.S. Munitions List on 
December 10, 2010 (75 FR 76930).
    BIS received numerous comments on the proposed License Exception 
STA and the CCL notice, most of them detailed, thoughtful, and 
technically expert. BIS issued the final rule implementing License 
Exception STA on June 16, 2011 (76FR 35276) having benefited 
significantly from such public participation, and anticipates that the 
continuing effort to coordinate, simplify, and harmonize export 
controls across agencies will be similarly informed by public response 
to the notice.
    A core proposal intended to bring about the initiative's national 
security objectives is to transfer jurisdiction over less significant 
defense articles, principally generic parts and components, that are 
controlled by the regulations administered by the State Department to 
the export control regulations administered by the Commerce Department, 
which are more capable of having controls tailored to the significance 
of the item and the degree of risk associated with its export to 
different groups of countries. This plan will advance the national 
security objectives of export control reform by allowing for greater 
interoperability with our NATO partners and other close allies and also 
will strengthen the industrial base by removing incentives for foreign 
companies to design out or avoid US-origin content. This plan will also 
significantly reduce the licensing and other collateral burdens on 
exporters and the government while at the same time harmonizing the 
system to allow for the eventual creation of a single list of 
controlled items administered by a single licensing agency. (See 
``Proposed Revisions to the Export Administration Regulations (EAR): 
Control of Items the President Determines No Longer Warrant Control 
Under the United States Munitions List (USML),'' published on July 15, 
2011 (76 FR 41958).)
    In the coming months, the agencies involved in the Export Control 
Reform Initiative will continue the regulatory modifications necessary 
to harmonize export control lists and definitions, which will involve 
issuing a number of proposals. This effort will draw heavily on the 
resources of those agencies, but it will require the efforts of members 
of the public as well, who take time from their normal duties to review 
proposals and submit comments.

Export Administration Regulations

    The Export Control Reform Initiative is BIS's top priority, and as 
noted above, BIS requests that submission of reform-related comments be 
directed toward each specific proposal as it is published rather than 
as part of a general response to this notice of inquiry. Many key 
aspects of the EAR--which items are subject to the EAR and when they 
require licenses to which destination--will be addressed substantively 
by the Export Control Reform Initiative. In this notice of inquiry, BIS 
seeks comments on aspects of the EAR that are not immediately affected 
by the reform initiative and that could be clarified or streamlined to 
be more effective or less burdensome.
    Controls imposed by the EAR protect the national security and 
advance the foreign policy interests of the United States, creating a 
necessary licensing burden. This necessary licensing burden entails an 
equally necessary compliance burden. BIS seeks comments identifying any 
unnecessary compliance burden caused by rules that are unduly complex, 
outmoded, inconsistent, or overlapping, and comments identifying ways 
to make any aspect of the EAR more effectively protect the national 
security or advance the foreign policy interests of the United States.

Chemical Weapons Convention Regulations

    The Chemical Weapons Convention Regulations (15 CFR parts 710 
through 729) (CWCR) implement certain obligations of the United States 
under the Convention on the Prohibition of the Development, Production, 
Stockpiling and Use of Chemical Weapons and on Their Destruction, known 
as the CWC or Convention.

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Additional Protocol Regulations

    The Additional Protocol Regulations (15 CFR parts 781 through 786) 
(APR) implement certain obligations of the United States under the 
Protocol Additional to the Agreement Between the United States of 
America and the International Atomic Energy Agency Concerning the 
Application of Safeguards in the United States of America, known as the 
Additional Protocol. These obligations relate to nuclear fuel cycle-
related activities.

National Security Industrial Base Regulations

    The National Security Industrial Base Regulations (15 CFR 700 
through 705) include the Defense Priorities and Allocations System, 
Reporting of Offsets Agreements in Sales of Weapon Systems or Defense-
Related Items to Foreign Countries or Foreign Firms, and Effect of 
Imported Articles on the National Security. Because the rules regarding 
reporting of offsets agreements were recently revised (74 FR 68136), 
BIS is not soliciting comments on 15 CFR part 701 with this notice of 
inquiry. BIS also published a proposed rule regarding the Defense 
Priorities and Allocations System Regulations (75 FR 32122) and has yet 
to publish a final rule. BIS is not soliciting comments on 15 CFR part 
700 with this notice of inquiry.

Public Comments

    With respect to improving existing rules or eliminating outmoded 
ones, BIS would like to receive comments that are as specific and well-
supported as possible. Helpful comments will include a description of a 
problem or concern, available data on cost or economic impact, and a 
proposed solution. BIS also welcomes comments on rules the public 
considers effective or well designed. BIS is also interested in 
information on foreign countries' implementation of export controls. In 
the interest of fostering open exchange, BIS encourages those 
interested in submitting comments to peruse those already posted on 
regulations.gov.

    Dated: August 1, 2011.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2011-19947 Filed 8-4-11; 8:45 am]
BILLING CODE 3510-33-P