[Federal Register Volume 81, Number 109 (Tuesday, June 7, 2016)]
[Proposed Rules]
[Pages 36481-36484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13397]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 730, 747, 748, and 762

[Docket No. 160303182-6182-01]
RIN 0694-AG89


Amendment to the Export Administration Regulations: Removal of 
Special Iraq Reconstruction License

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Proposed rule.

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SUMMARY: In this rule, the Bureau of Industry and Security (BIS) 
proposes to amend the Export Administration Regulations (EAR) to remove 
the Special Iraq Reconstruction License (SIRL) from the EAR. The 
action, if published in final form, would further the objectives of the 
Retrospective Regulatory Review Initiative that directs BIS and other 
federal agencies to streamline regulations and reduce unnecessary 
regulatory burdens on the public. Specifically, the SIRL is outdated 
and seldom used by exporters, who now have more efficient options for 
exports and reexports to Iraq and transfers (in-country) in Iraq. This 
rule also makes conforming changes.

DATES: Comments must be received by July 7, 2016.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
The identification number for this rulemaking is BIS-2016-0017.
     By email directly to: publiccomments@bis.doc.gov. Include 
RIN 0694-AG89 in the subject line.
     By mail or delivery to Regulatory Policy Division, Bureau 
of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th 
Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 
0694-AG89.

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FOR FURTHER INFORMATION CONTACT: Thomas Andrukonis, Director, Export 
Management and Compliance Division, Office of Exporter Services, Bureau 
of Industry and Security, by telephone at (202) 482-8016 or by email at 
Thomas.Andrukonis@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    In this rule, the Bureau of Industry and Security (BIS) proposes to 
continue to advance the President's directives in the Retrospective 
Regulatory Review Initiative to streamline regulations, reduce 
unnecessary regulatory burdens on the public and modernize export 
controls. (See ``Improving Regulatory Review'' (Executive Order 13563 
of January 18, 2011). Consistent with these directives and objectives, 
in this rule, BIS proposes to remove the Special Iraq Reconstruction 
License (SIRL) from the Export Administration Regulations (EAR).
    BIS established the SIRL in 2004 (69 FR 46070, July 30, 2004) to 
supplement options to facilitate exports and reexports to Iraq and 
transfers within Iraq of items in furtherance of civil reconstruction 
and other projects in Iraq funded by specified entities, including the 
United States government. At the time of its establishment, SIRL was 
intended to benefit the public by allowing for faster processing times 
as compared to individual license applications, and longer license 
validity periods, which would extend to the completion or 
discontinuation of the associated reconstruction project (in contrast, 
individual license applications generally only had a two-year validity 
period). However, exporters supplying items used in support of the 
civil reconstruction efforts in Iraq have not relied on the SIRL to 
advance those efforts, apparently because of its complexity and 
narrowness.
    Since 2004, BIS has processed only three applications for the SIRL, 
and granted only one approval, as compared to over 400 approved 
individual license applications for items to Iraq between 2012 and 
2015. A SIRL applicant must provide details regarding the items to be 
exported or reexported to or transferred within Iraq, a narrative 
statement to identify all parties to the transaction, and a description 
of the reconstruction project that formed the basis of the transaction. 
In addition, the applicant must provide separate written statements 
from all agencies providing funding, and certification that all parties 
to the transaction will obtain licenses prior to transferring the items 
on the license application within Iraq or reexporting the items to end 
users not authorized under the SIRL. SIRL holders must submit reports 
when the Iraq project is discontinued or is completed and must get 
approval from BIS to make specified changes to the respective SIRL. 
These requirements are numerous compared to the individual license 
application process or the use of other authorizations such as eligible 
license exceptions, resulting in exporters choosing to apply for or use 
individual licenses and other authorizations under the EAR to ship 
items to Iraq instead of the SIRL.
    In addition, with the implementation of updates to the EAR, the 
relative advantages of the SIRL have been offset by changes to 
individual licenses and other types of authorizations offered by BIS 
that provide less complex alternatives to the SIRL. For example, in 
addition to streamlined procedures for submitting license applications 
and improved processing times, BIS now issues individual licenses with 
a four-year validity period, with agency consideration of requests to 
extend the validity period. Similarly, most individual licenses now do 
not include a requirement for reports on the authorized items exported 
or reexported. Additionally, license exceptions such as License 
Exception Temporary imports, exports, and reexports, and transfers (in-
country) (TMP) (Section 740.9 of the EAR) have been expanded. (TMP now 
includes authorizations for temporary exports to a U.S. person's 
foreign subsidiary, affiliates, or facility abroad outside of Country 
Group B. Additionally, BIS will, upon request, authorize the retention 
of items abroad that were exported under License Exception TMP beyond 
one year and up to a total of four years.)
    Thus, the SIRL has proven not to be useful. Its removal from the 
EAR is consistent with and would advance regulatory initiatives 
priorities. As part of the removal, this rule also would make 
conforming changes in the EAR.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of 
August 7, 2015, 80 FR 48233 (August 11, 2015), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222 as amended by Executive Order 
13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This rule has been determined to be not significant for purposes of 
Executive Order 12866.
    2. This rule amends collections previously approved by the Office 
of Management and Budget (OMB) under Control Numbers 0694-0088, 
``Simplified Network Application Processing + System (SNAP+) and the 
Multi-Purpose Application,'' which carries a burden hour estimate of 
43.8 minutes to prepare and submit form BIS-748; and 0694-0137, 
``License Exemptions and Exclusions.''
    The total burden hours associated with the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) (PRA) and the aforementioned OMB 
Control Numbers would be expected to decrease as a result of this 
proposed removal of part 747 of the EAR and related provisions if the 
rule is eventually issued in final form, thereby reducing burden hours 
associated with approved collections related to the EAR.
    Public comment is sought regarding: whether the collection of 
information, for the provisions BIS proposes to remove, is necessary 
for the proper performance of the functions of the agency, including 
whether the information shall have practical utility; the accuracy of 
the burden estimate; ways to enhance the quality, utility, and clarity 
of the information to be collected; and ways to minimize the burden of 
the collection of information, including through the use of automated 
collection techniques or other forms of information technology. Send 
comments on these or any other aspects of the collection of information 
to Regulatory Policy Division, Bureau of Industry and Security, U.S. 
Department of Commerce at the ADDRESSES above, and email to OMB at 
OIRA_Submission@omb.eop.gov, or fax to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply

[[Page 36483]]

with, a collection of information subject to the requirements of the 
PRA, unless that collection of information displays a currently valid 
OMB Control Number.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.). 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 this rule would have no economic 
impact, because, although this rule would eliminate the availability of 
the SIRL, entities are not using the SIRL. Moreover, they could still 
obtain individual validated licenses from BIS to export their 
product(s). The individual validated licenses that BIS issues are 
generally less burdensome and require fewer compliance/reporting 
measures than the measures required for a SIRL. For example, a SIRL 
applicant must provide a narrative statement to identify all parties to 
the transaction, and a description of the reconstruction project. In 
addition, the applicant must provide separate written statements for 
all participating agencies and certification that all parties to the 
transaction will obtain licenses prior to transferring items within 
Iraq or reexporting items outside of Iraq for end users not authorized 
under the SIRL. SIRL holders must submit reports when the Iraq project 
is discontinued or is completed and must get prior approval for any 
changes to their SIRL. Although these requirements may be included as 
conditions on an individual validated license, BIS's license 
applications review process for individual validated licenses includes 
other methods, less burdensome on the exporter, to vet the bona fides 
of parties to the proposed transaction and to verify compliance. Also, 
impacted entities would have the convenience of applying for a license 
via the Simplified Network Application Process-Redesign (SNAP-R) 
System, an updated system for electronically filing export and reexport 
license applications, which is not available for the submission of SIRL 
applications. Finally, the historical lack of usage of the SIRL does 
not warrant maintaining such a complex option.
    Number of Small Entities. Since the SIRL's introduction in 2004, 
there have been only three applications for it, with only one 
application approved. Due to the nature of the SIRL and the complexity 
of its requirements, BIS expects that past applicants would be 
considered large entities under the Small Business Administration's 
size standards. However, BIS does not collect data on the size or 
annual revenue of these entities, and thus some of these entities may 
be considered small under the SBA size standards. Also, although small 
entities likely would not be the direct or the primary users of the 
SIRL, BIS acknowledges that small entities may have been parties to 
SIRL transactions. To assist in the evaluation of a significant 
economic impact of this rule on a substantial number of small entities, 
BIS welcomes comments to explain how and to what extent your business 
or organization could be affected, if your business or organization is 
a small entity and if adoption of any of the amendments discussed in 
this proposed rulemaking could have a significant financial impact on 
your operations.

List of Subjects

15 CFR Part 730

    Administrative practice and procedure, Advisory committees, 
Exports, Reporting and recordkeeping requirements, Strategic and 
critical materials.

15 CFR Part 747

    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and recordkeeping requirements.

15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 762

    Administrative practice and procedure, Business and industry, 
Confidential business information, Exports, Reporting and recordkeeping 
requirements.

    Accordingly, parts 730, 747, 748 and 762 of the Export 
Administration Regulations (15 CFR parts 730-774) are amended as 
follows:

PART 730--[AMENDED]

0
1. The authority citation for part 730 continues to read as follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 10 
U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 
22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 
U.S.C. 2139a; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. 4305; 22 
U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 11912, 41 FR 15825, 3 CFR, 
1976 Comp., p. 114; E.O. 12002, 42 FR 35623, 3 CFR, 1977 Comp., p. 
133; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12214, 
45 FR 29783, 3 CFR, 1980 Comp., p. 256; E.O. 12851, 58 FR 33181, 3 
CFR, 1993 Comp., p. 608; E.O. 12854, 58 FR 36587, 3 CFR, 1993 Comp., 
p. 179; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p. 899; E.O. 
12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 
5079, 3 CFR, 1995 Comp., p. 356; E.O. 12981, 60 FR 62981, 3 CFR, 
1995 Comp., p. 419; E.O. 13020, 61 FR 54079, 3 CFR, 1996 Comp., p. 
219; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13099, 
63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 44025, 3 
CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3 CFR, 2001 Comp., 
p. 786; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; E.O. 
13637, 78 FR 16129, 3 CFR, 2014 Comp., p. 223; Notice of May 6, 
2015, 80 FR 26815 (May 8, 2015); Notice of August 7, 2015, 80 FR 
48233 (August 11, 2015); Notice of September 18, 2015, 80 FR 57281 
(September 22, 2015); Notice of November 12, 2015, 80 FR 70667 
(November 13, 2015); Notice of January 20, 2016, 81 FR 3937 (January 
22, 2016).


Supplement No. 1 to Part 730--  [Amended]

0
2. Supplement No. 1 to Part 730 is amended by revising the entry for 
Collection number ``0694-0129''. The revision reads as follows:

SUPPLEMENT NO. 1 TO PART 730--INFORMATION COLLECTION REQUIREMENTS UNDER 
THE PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS

* * * * *

------------------------------------------------------------------------
       Collection No.                 Title         Reference in the EAR
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                              * * * * * * *
0694-0129...................  Export and Reexport   Sec.  Sec.   732.3,
                               Controls For Iraq.    738, 744.18,
                                                     746.3(b)(1), 750,
                                                     758, 762, 772, 774.
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[[Page 36484]]

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PART 747--[REMOVED AND RESERVED]

0
3. Remove and reserve part 747.

PART 748--[AMENDED]

0
4. The authority citation for part 748 continues to read as follows:

    Authority:  50 U.S.C. 4601 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 7, 2015, 80 FR 
48233 (August 11, 2015).


Sec.  748.1--[Amended]  

0
5. Section 748.1 is amended by removing the parenthetical phrase 
``(other than Special Iraq Reconstruction License applications)'' from 
the first sentence of paragraph (d).


Sec.  748.7--[Amended]  

0
6. Section 748.7 is amended by removing the parenthetical phrase 
``(other than Special Iraq Reconstruction Licenses)'' from paragraphs 
(a) and (d).

PART 762--[AMENDED]

0
7. The authority citation for part 762 continues to read as follows:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; E.O. 
13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 
2015, 80 FR 48233 (August 11, 2015).


Sec.  762.2--[Amended]  

0
8. Section 762.2 is amended by removing and reserving paragraph 
(b)(17).

    Dated: June 1, 2016.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2016-13397 Filed 6-6-16; 8:45 am]
 BILLING CODE 3510-33-P