[Federal Register Volume 77, Number 104 (Wednesday, May 30, 2012)]
[Proposed Rules]
[Pages 31765-31767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12968]


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DEPARTMENT OF COMMERCE

Minority Business Development Agency

15 CFR Part 1400

[Docket No. 120517080-2080-01]


Petition for Inclusion of the Arab-American Community in the 
Groups Eligible for MBDA Services

AGENCY: Minority Business Development Agency, Commerce.

ACTION: Notice of proposed rulemaking and request for comments.

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SUMMARY: The Minority Business Development Agency (MBDA) publishes this 
notice regarding the petition received on January 11, 2012 from the 
American-Arab Anti-Discrimination Committee (ADC) requesting formal 
designation of Arab-Americans as a minority group that is socially or 
economically disadvantaged pursuant to 15 CFR art 1400. The formal 
designation of the Arab-American community as a group that is socially 
or economically disadvantaged would allow the members of this community 
to receive assistance from MBDA funded programs, such as the MBDA 
Business Center program. The ADC filed a petition, pursuant to 15 CFR 
part 1400.3, including information specifically related to social and 
economic discrimination against Arab-Americans. This Notice provides 
public notice that the United States Department of Commerce 
(Department) will consider the petition and requests public comment on 
the propriety of this designation. MBDA will make a decision on the 
application no later than June 27, 2012.

DATES: Comments must be received by MBDA no later than June 29, 2012.

ADDRESSES: You may submit comments, identified with Docket No. 
120517080-2080-01, using any of the following methods:
     Mail, Hand/Delivery/Courier: Ms. Josephine Arnold, Chief 
Counsel,

[[Page 31766]]

Minority Business Development Agency, Department of Commerce, 1401 
Constitution Avenue NW., Room 5093, Washington, DC 20230.
     Electronic mail: Submit comments in Microsoft Word or .pdf 
format to [email protected].

All comments will be posted on the MBDA Web site at http://www.mbda.gov. If you wish to submit confidential business information, 
please submit the comments to the attention of Josephine Arnold and 
highlight the information that you consider to be CBI and explain why 
you believe this information should be held confidential. MBDA will 
make a final determination as to whether the comments will be published 
or not.

FOR FURTHER INFORMATION CONTACT: Robert Cobbs, Minority Business 
Development Agency, 1401 Constitution Avenue NW., Room 5053, 
Washington, DC 20230. Mr. Cobbs may be reached by telephone at (202) 
482-2332 and by email at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The MBDA, pursuant to Executive Order 11625, funds business centers 
that provide business development services to business concerns owned 
and controlled by individuals who are members of groups determined by 
the Department to be socially or economically disadvantaged. Based on 
the current definitions, the groups considered ``socially and 
economically disadvantaged,'' listed in Executive Order 11625, are 
``Black, Puerto-Ricans, Spanish-speaking Americans, American Indians, 
Eskimos, and Aleuts.'' \1\ In addition, Hasidic Jews, Asian Pacific 
Americans and Asian Indians have been included in the list of the 
groups who are socially or economically disadvantaged and thus eligible 
for assistance from the MBDA in 15 CFR part 1400.1(c).
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    \1\ Exec. Order No. 11625, 3 CFR part 616 (1971-1975).
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    The Department is considering the petition of the ADC requesting 
the addition of Arab-Americans to the list of persons considered 
``socially and economically disadvantaged'' pursuant to E.O. 11625 and 
15 CFR part 1400. An Arab-American may be defined as an American who 
traces his or her ethnic roots to one of the countries in the Arab 
World, including Algeria, Bahrain, Djoubti, Egypt, Iraq, Jordan, 
Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Somalia, 
Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen. 
According to the petition, Palestinians also fall under this category. 
The ADC petition describes the social and economic conditions that 
Arab-Americans have faced allegedly amounting to discrimination and 
prejudice in American society and resulting in conditions under which 
Arab-American individuals have been unable to compete in a business 
world.\2\ The petition provides details of the social and economic 
discrimination faced by Arab-Americans. A summary of those details from 
the ADC petition are presented below in Section II.
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    \2\ American-Arab Anti-Discrimination Committee (ADC) Petition 
(filed, January 11, 2012) (ADC Petition or Pet.).
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II. Social and Economic Discrimination Against Arab-Americans

A. Social Discrimination

    According to the Petition, Arab-Americans are subject to many 
prejudices as a result of their distinct cultural and ethnic 
characteristics. While many of those who consider themselves Arabs are 
Muslim, the Arab-American Institute states that most Arab-Americans are 
Christian.\3\ Most Arab-Americans speak Arabic, a language that has 
become one of the defining characteristics of the group.\4\ Further, 
Arab-Americans are known for their different food dishes (tabouli, 
kibbah, and kabshah) and their unique music tradition that includes the 
use of percussion instruments not normally found in American 
culture.\5\ These are just a number of ways in which Arab-American 
culture differs from American culture and the distinctions that have 
resulted in the prejudices aimed towards the group.
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    \3\ Pet. at 4.
    \4\ Pet. at 4.
    \5\ Pet. at 5.
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    The petition states that Arab-Americans have faced discrimination 
since the late 1800s, similar to most other minority groups.\6\ They 
were treated the same way as many other minority groups in the United 
States and had specific derogatory names directed towards them.\7\ 
While this discrimination initially did not hinder their ability to 
obtain American citizenship, the situation changed in 1910 when the 
U.S. Census Bureau classified Syrian and Palestinian Arabs as 
``Asiatics.'' \8\ The Bureau of Immigration and Naturalization, which 
initially considered Syrians and Palestinians as ``Caucasians,'' 
subsequently issued a nationwide directive ordering the rejection of 
citizenship petitions for persons who were not ``free white persons'' 
or of ``African nativity.'' \9\ Some courts declared that Syrians could 
be considered ``white'' while other courts ruled that they were not 
``free white persons.'' \10\ For example, after World War I, the 
government passed the Quota Act that limited the annual quota of 
nationality to 3 percent of the foreign-born persons from that 
country.\11\ According to the ADC petition, even though the policy was 
facially race neutral, the implications for Arab-Americans, was 
dire.\12\ The ADC petition notes that Arab immigrants were denied 
citizenship, except 100 persons annually, under the Quota Act which is 
widely viewed as an attempt to limit immigration from Arab 
countries.\13\ While the policy was negated by the Immigration Bill in 
1965, the ADC petition asserts that Arab-Americans continue to face 
discrimination in public and private employment, housing, government 
contracts and government benefits.\14\
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    \6\ Pet. at 8.
    \7\ Pet. at 9.
    \8\ Pet. at 10.
    \9\ Pet. at 10.
    \10\ Pet. at 10-11.
    \11\ Pet. at 13.
    \12\ Pet. at 13.
    \13\ Pet. at 13.
    \14\ Pet. at 14-15.
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    The ADC petition mentions a number of court cases that highlight 
discrimination against Arab Americans on the sole basis of their ethnic 
background, including a case where three elevator employees were 
awarded $30,000 in damages as a result of the years of harassment they 
endured.\15\ This level of discrimination increased drastically after 
the September 11 attacks.\16\ According to the petition, while the 
attacks were carried out by a small group of extremists, the entire 
Arab-American community suffered from the prejudices other American 
citizens formed.\17\
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    \15\ Zaytoun v. Embassy Row Hotel, Inc., No. 6744-83 (D.C. 
Super. Ct. June 21, 1985).
    \16\ Pet. at 17.
    \17\ Pet. at 17.
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    The Petition notes that following September 11, 2001, the FBI and 
other institutions reported a substantial increase in reports of 
discrimination and harassment against Arab-Americans (the FBI reported 
a 1600 percent increase).\18\ According to the ADC petition, these 
reports were exacerbated by government-implemented policies that 
inherently targeted Arab-Americans. The ADC petition asserts that, in 
the government's efforts to protect Americans, they essentially took 
away the rights of other Americans and provides the following as 
examples of

[[Page 31767]]

such government-sponsored programs: The National Security Entry Exit 
Registration System NSEERS, which required non-immigrants to register 
at ports of entry and targeted males from Arab nations; stricter travel 
guidelines; and ``no-fly'' lists which predominantly contained the 
names of Arab-Americans. According to the Petition, these restrictions 
hindered the Arab-American community's freedom and as a result, their 
ability to contribute to a healthy American economy.\19\
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    \18\ Pet. at 18.
    \19\ Pet. at 18-21.
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B. Economic Discrimination

    According to the ADC Petition, Arab-Americans also face economic 
discrimination as employees and business owners. Citing instances where 
employees are continuously harassed because of their ethnicity and are 
subject to constant name-calling and racial profiling, the petition 
asserts that Arab-Americans either have to constantly deal with 
discrimination enforced by their employers, their fellow employees or 
customers that frequent their places of employment.\20\ The petition 
also notes that Arab-Americans have fewer job opportunities, a 
situation that has been exacerbated by the September 11 attacks and 
asserts that this fact is supported by a number of studies that 
highlight employment discrimination against Arab Americans as well as 
the high number of complaints the ADC receives yearly despite the time 
that has passed since 9/11.\21\
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    \20\ Pet. at 21.
    \21\ Pet. at 21-25.
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    According to the ADC Petition, the discrimination that Arab-
American employees face has decreased their earnings.\22\ One study 
showed that the earning potential of Arab American men dropped 
considerably between 2000 and 2002 as compared to U.S.-born non-
Hispanic white men.\23\ Their ability to positively contribute to the 
economy has also been significantly altered as a result of the 
increased instances of government-sponsored inspections of workplaces 
that may have hired individuals with suspected terrorist ties.\24\
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    \22\ Id. at 23, citing American-Arab Anti-Discrimination 
Committee (ADC), 2010 Legal Department: Legal and Policy Review, p. 
1.
    \23\ Pet. at 26, citing Alberto Davila and Marie Mora, Changes 
in Earnings of Arab Men in the U.S., Journal of Population 
Economics, 2005, vol. 18, issue 4, p. 588.
    \24\ Pet. at 25-27.
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    Arab-American business owners and entrepreneurs also face economic 
discrimination. Individuals from the Arab-American community are unable 
to earn up to their potential as compared to their non-Hispanic white 
counterparts in similar industries. The Petition notes that while many 
Arab-Americans are educated and would contribute tremendously to the 
U.S. economy if they were able to enter into the market, they are held 
back because of their ethnic background. Also, many times Arab-
Americans are confined solely to the small Arab-American communities in 
which they live because they face harassment if they attempt to expand 
their business. The Petition further asserts that Arab Americans 
receive few prime government contracts, as exemplified by a case study 
conducted in San Francisco between 1992 and 1995.\25\ During that time 
period, Arab-Americans received no construction contracts despite 
representing a significant amount of the available professional service 
firms. This can be compared to Latino-Americans, a group already 
included in the definition of ``minority business enterprise,'' who 
only received 1 percent of professional service dollars despite 
representing 6 percent of the professional service firms.\26\
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    \25\ Pet. at 29.
    \26\ Pet. at 29-31.
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III. Objectives and Scope

    By categorizing Arab-Americans as ``socially and economically 
disadvantaged business concerns'' under 15 CFR part 1400, the same the 
benefits granted to other socially and economically disadvantaged 
persons specified under Part 1400 will be available to Arab-American 
persons and businesses. Specifically, under 15 CFR part 1400, Arab-
Americans will be eligible to qualify for MBDA programs and 
opportunities that help minority businesses overcome discrimination and 
prejudice as business owners.\27\
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    \27\ Pursuant to 15 CFR 1400.1, the designation for eligibility 
under Executive Order 11625 will not establish eligibility for any 
other Federal or Federally-funded program.
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    The comments received will be reviewed for applicability to the 
issues to be addressed. MBDA will consider only those comments that 
address the relevance of including Arab-Americans in the definition of 
those who are ``socially and economically disadvantaged.'' Commenters 
should address the following issues in the context of the requirements 
of the applicable regulations.\28\ If any comments received meet the 
criterion, they will be included in the final decision.
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    \28\ See 15 CFR 1400.4.
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    MBDA solicits general comments and comments on the Petition that 
address the following specific issues:

A. Societal Discrimination

    1. Are there specific instances of social discrimination against 
Arab-Americans that occur over a sustained period of time, which 
results in significant social or economic disadvantage?
    2. Are there any additional characteristics specific to the Arab-
American community, other than those described in the ADC Petition, 
that invoke societal discrimination?
    3. Is there evidence that demonstrates Arab-Americans have been 
subject to employment or educational discrimination? If so, please 
describe.
    4. Is there evidence that demonstrates that Arab-Americans have 
been denied access to organizations, groups, professional societies or 
other types of business opportunities in comparison to individuals who 
are not considered socially or economically disadvantaged?

B. Economic Discrimination

    1. What evidence exists that demonstrates Arab-Americans have faced 
economic discrimination over a sustained period of time resulting in 
social or economic disadvantage?
    2. Please provide any specific information which demonstrates that 
Arab-Americans have experienced difficulty in obtaining access to 
capital, technical, or managerial resources as compared to individuals 
who are not considered socially or economically disadvantaged.
    3. Is there any additional evidence of denied opportunities for 
Arab-Americans to access to those things which would enable them to 
participate more successfully in the American economic system that is 
readily available to individuals not considered to be socially or 
economically disadvantaged?

Josephine Arnold,
Chief Counsel, Minority Business Development Agency.
[FR Doc. 2012-12968 Filed 5-29-12; 8:45 am]
BILLING CODE 3510-21-P