[Federal Register Volume 77, Number 54 (Tuesday, March 20, 2012)]
[Notices]
[Page 16207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6672]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[Docket No. 120309179-2147-01]
XRIN 0694-XA41


Reporting for Calendar Year 2011 on Offsets Agreements Related to 
Sales of Defense; Articles or Defense Services to Foreign Countries or 
Foreign Firms

AGENCY: Bureau of Industry and Security, Department of Commerce.

ACTION: Notice; annual reporting requirements.

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SUMMARY: This notice is to remind the public that U.S. firms are 
required to report annually to the Department of Commerce (Commerce) 
information on contracts for the sale of defense articles or defense 
services to foreign countries or foreign firms that are subject to 
offsets agreements exceeding $5,000,000 in value. U.S. firms are also 
required to report annually to Commerce information on offsets 
transactions completed in performance of existing offsets commitments 
for which offsets credit of $250,000 or more has been claimed from the 
foreign representative. This year, such reports must include relevant 
information from calendar year 2011 and must be submitted to Commerce 
no later than June 15, 2012.

ADDRESSES: Reports should be addressed to ``Offsets Program Manager, 
U.S. Department of Commerce, Office of Strategic Industries and 
Economic Security, Bureau of Industry and Security, Room 3878, 
Washington, DC 20230.''

FOR FURTHER INFORMATION CONTACT: Ronald DeMarines, Office of Strategic 
Industries and Economic Security, Bureau of Industry and Security, U.S. 
Department of Commerce, telephone: (202) 482-3755; fax: (202) 482-5650; 
email: ronald.demarines@bis.doc.gov.

SUPPLEMENTARY INFORMATION: 

Background

    Section 723(a)(1) of the Defense Production Act of 1950, as amended 
(DPA) requires the President to submit an annual report to Congress on 
the impact of offsets on the U.S. defense industrial base. Section 
723(a)(2) directs the Secretary of Commerce (Secretary) to prepare the 
President's report and to develop and administer the regulations 
necessary to collect offsets data from U.S. defense exporters.
    The authorities of the Secretary regarding offsets have been 
delegated to the Under Secretary of Commerce for Industry and Security. 
The regulations associated with offsets reporting are set forth in part 
701 of title 15 of the Code of Federal Regulations. Offsets are 
compensation practices required as a condition of purchase in either 
government-to-government or commercial sales of defense articles and/or 
defense services, as defined by the Arms Export Control Act and the 
International Traffic in Arms Regulations. For example, a company that 
is selling a fleet of military aircraft to a foreign government may 
agree to offset the cost of the aircraft by providing training 
assistance to plant managers in the purchasing country. Although this 
distorts the true price of the aircraft, the foreign government may 
require this sort of extra compensation as a condition of awarding the 
contract to purchase the aircraft. As described in the regulations, 
U.S. firms are required to report information on contracts for the sale 
of defense articles or defense services to foreign countries or foreign 
firms that are subject to offsets agreements exceeding $5,000,000 in 
value. U.S. firms are also required to report annually information on 
offsets transactions completed in performance of existing offsets 
commitments for which offsets credit of $250,000 or more has been 
claimed from the foreign representative.
    Commerce's annual report to Congress includes an aggregated summary 
of the data reported by industry in accordance with the offsets 
regulation and the DPA. As provided by section 723(c) of the DPA, BIS 
will not publicly disclose individual firm information it receives 
through offsets reporting unless the firm furnishing the information 
specifically authorizes public disclosure. The information collected is 
sorted and organized into an aggregate report of national offsets data, 
and therefore does not identify company-specific information.
    In order to enable BIS to prepare the next annual offset report 
reflecting calendar year 2011 data, U.S. firms must submit required 
information on offsets agreements and offsets transactions from 
calendar year 2011 to BIS no later than June 15, 2012.

    Dated: March 14, 2012.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2012-6672 Filed 3-19-12; 8:45 am]
BILLING CODE 3510-JT-P