[Federal Register Volume 84, Number 192 (Thursday, October 3, 2019)]
[Proposed Rules]
[Pages 52819-52826]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21301]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

10 CFR Part 810

RIN 1994-AA05


Assistance to Foreign Atomic Energy Activities

AGENCY: National Nuclear Security Administration (NNSA), Department of 
Energy (DOE).

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: DOE proposes procedures for the imposition of civil penalties 
for violations of the provisions of the Atomic Energy Act of 1954 (AEA) 
that restrict participation by U.S. persons in the development or 
production of special nuclear material outside of the United States. 
This proposed rule provides procedures to implement a statutory 
amendment contained within the John S. McCain National Defense 
Authorization Act for Fiscal Year 2019.

DATES: Comments on this proposed rulemaking must be received on or 
before November 4, 2019.

ADDRESSES: You may submit comments, identified by RIN 1994-AA05, by any 
of the following methods:
    1. Federal Rulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. Email: [email protected]. Include RIN 1994-AA05 in the 
subject line of the message.
    3. Mail: Katie Strangis, Office of Nonproliferation and Arms 
Control, NA-24, National Nuclear Security Administration, Department of 
Energy, 1000 Independence Avenue SW, Washington, DC 20585.
    Due to potential delays in DOE's receipt and processing of mail 
sent through the U.S. Postal Service, DOE encourages responders to 
submit comments electronically to ensure timely receipt.
    All submissions must include the RIN for this rulemaking, RIN 1994-
AA05. For detailed instructions on submitting comments and additional 
information on the rulemaking process, see the ``Public Comment 
Procedures'' heading of the SUPPLEMENTARY INFORMATION section of this 
document.

FOR FURTHER INFORMATION CONTACT: Ms. Katie Strangis, Senior Policy 
Advisor, Office of Nonproliferation and Arms Control (NPAC), National 
Nuclear Security Administration, Department of Energy, 1000 
Independence Avenue SW, Washington, DC 20585, telephone (202) 586-8623 
or email: [email protected]; Mr. Thomas Reilly, Office of the 
General Counsel, GC-53, Department of Energy, 1000 Independence Avenue 
SW, Washington, DC 20585, telephone (202) 586-3417; or Mr. Zachary 
Stern, Office of the General Counsel, National Nuclear Security 
Administration, Department of Energy, 1000 Independence Avenue SW, 
Washington, DC 20585, telephone (202) 586-8627.

SUPPLEMENTARY INFORMATION:
I. Introduction
II. Discussion of the Proposed Rule
III. Public Comment Procedures
IV. Regulatory Review
V. Approval of the Office of the Secretary

I. Introduction

    DOE's 10 CFR part 810 regulation (Part 810) implements section 57 
b.(2) of the AEA (42 U.S.C. 2077), as amended. Part 810 controls the 
export of unclassified nuclear technology and assistance. It enables 
peaceful nuclear trade by helping to ensure that nuclear technologies 
exported from the United States will not be used for non-peaceful 
purposes. Part 810 controls the export of nuclear technology and 
assistance by identifying some activities as ``generally authorized'' 
by the Secretary of Energy

[[Page 52820]]

(Secretary), thereby requiring no further authorization under Part 810 
by DOE prior to engaging in such activities. For activities and/or 
destinations that are not generally authorized, Part 810 requires a 
``specific authorization'' by the Secretary. Part 810 also details a 
process to apply for specific authorization from the Secretary and 
specifies the reporting requirements for generally and specifically 
authorized activities subject to Part 810. Violations of section 57 b. 
of the AEA and Part 810 may result in revocation, suspension, or 
modification of authorizations, pursuant to 10 CFR 810.10, as well as 
criminal penalties, pursuant to 10 CFR 810.15.
    Section 3116(b) of the John S. McCain National Defense 
Authorization Act for Fiscal Year 2019 (NDAA), Public Law 115-232, 
amended section 234 a. of the AEA (42 U.S.C. 2282(a)) to clarify DOE's 
authority to impose civil penalties for violations of section 57 b. of 
the AEA, as implemented under Part 810. This proposed rule would update 
Part 810 to include new procedures to implement this authority.

II. Discussion of the Proposed Rule

    The goals of the Part 810 enforcement program are to deter illicit 
transfers of U.S. nuclear technology and assistance controlled under 
Part 810, to encourage full and accurate compliance with the reporting 
requirements, and to incentivize prompt self-reporting of regulatory 
violations. Civil penalties are a useful tool in attaining those 
objectives, and DOE is authorized to impose civil penalties under 
section 234 a. of the AEA (42 U.S.C. 2282(a)). Section 234 a., as 
amended by section 3116(b) of the NDAA provides in part that persons 
that violate any provision of section 57 are subject to a civil 
penalty.
    This proposed rule would update 10 CFR 810.1 to identify 
specification of civil penalties and enforcement procedures as a 
purpose of the Part 810 regulation. This proposed rule would also 
update 10 CFR 810.15 to include procedures to implement DOE's civil 
penalty authority. It would establish procedures for DOE to impose a 
penalty not to exceed an amount identified by Congress and adjusted by 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015. This amount is to be annually adjusted pursuant to the Federal 
Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461.
    The authority to impose civil penalties for violations of section 
57 b. of the AEA as implemented under Part 810 was provided by section 
3116(b) of the NDAA for FY 2019, which amended section 234 a. of the 
AEA. Section 234 a. listed statutory provisions the violation of which 
would subject a person to an express civil penalty referencing an 
amount identified in section 234a. of the AEA. Separately, every 
Federal agency is required by law to adjust annually civil monetary 
penalties to account for inflation.
    Congress identified the upper bound penalty amount to be consistent 
with section 234a. of the AEA, which set the maximum penalty for a 
number of violations at $100,000, prior to enactment of the Federal 
Civil Penalties Inflation Adjustment Act of 1990 or the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015. DOE 
intends to apply the inflation adjustment to the section 234a. base 
amount of $100,000 and then to the extent permitted by law apply the 
catch-up adjustment required under OMB Memorandum M-16-06, the Federal 
guidance to implement the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015. Subsequent adjustments would be made 
following OMB Memoranda M-17-11, M-18-03, and M-19-04 for a maximum 
penalty of $265,815.
    Congress did not specifically change the amount of the allowable 
maximum penalty, as it did in previous amendments. There may be a 
question of whether Congress desired a lower maximum civil penalty 
amount to apply. An alternative approach would be to start with the 
statutory base amount of $100,000 as defined in section 234a. as 
amended and apply the 2019 inflation adjustment according to OMB 
Memorandum M-19-04 bringing it to $102,522.
    Pursuant to section 234 a. of the AEA, as amended, (42 U.S.C. 
2282(a)), this civil penalty is to be imposed per violation, and if a 
violation is a continuing one, each day from the point at which the 
violating activity began to the point at which the violating activity 
was suspended constitutes a separate violation for purposes of 
computing the civil penalty. The mere act of suspending an activity 
does not constitute admission that the activity was in violation of the 
Part 810 regulation, and does not waive the rights and processes 
outlined in paragraphs (c)(4) through (c)(14) of the proposed rule or 
otherwise impact the right of the person to appeal any civil penalty 
that may be imposed.
    The proposed rule would require DOE to give the person subject to 
the penalty notice of the violation and the proposed penalty, would 
provide the person an opportunity to respond to the notice and 
demonstrate why a proposed penalty should not be imposed, and would 
establish the process for a decision by the Deputy Administrator for 
Defense Nuclear Nonproliferation within DOE's National Nuclear Security 
Administration. It would also provide for an opportunity for a hearing 
and a subsequent final decision by the DOE Under Secretary for Nuclear 
Security.
    The proposed rule would require the Deputy Administrator for 
Defense Nuclear Nonproliferation or his/her designee to notify the 
person subject to the penalty, by a written notice of violation sent by 
registered or certified mail to the last known address of such person, 
of: The date, facts, and nature of each act or omission with which the 
person is charged; the particular provision or provisions of section 57 
b. of the AEA, as implemented under Part 810, involved in each alleged 
violation; the penalty which DOE proposes to impose; the opportunity of 
the person to submit a written reply within 30 calendar days of receipt 
of such preliminary notice of violation showing why such penalty should 
not be imposed; and the possibility of collection by civil action upon 
failure to pay the civil penalty.
    The proposed rule would require that a reply to a notice of 
violation: State any facts, explanations, and arguments which support a 
denial of the alleged violation; demonstrate any extenuating 
circumstances or other reason why a proposed penalty should not be 
imposed or should be mitigated; discuss the relevant authorities which 
support the position asserted; furnish full and complete answers to any 
questions set forth in the notice of violation; and include copies of 
all relevant documents. DOE guidance regarding self-disclosures of 
violations of Part 810 is set forth on the Part 810 website (https://www.energy.gov/nnsa/10-cfr-part-810), under ``Part 810 Frequently Asked 
Questions,'' and specifies that self-disclosures must be made via email 
to [email protected] within 30 days of becoming aware of a violation 
or potential violation of Part 810, and that when considering instances 
of actual or potential violations, DOE will take into account whether 
the violation in question was self-reported.
    The proposed rule provides that if a person fails to submit a 
written reply within 30 calendar days of receipt of a notice of 
violation, the notice of violation, including any penalties therein, 
would constitute a final decision, and payment of the full amount of 
the civil penalty assessed in the notice of violation would be due 30 
calendar days after receipt of the notice of violation. Such failure to 
submit a reply would constitute a waiver of the

[[Page 52821]]

rights and processes outlined in paragraphs (c)(4) through (c)(14) of 
the proposed rule.
    The proposed rule provides that the Deputy Administrator for 
Defense Nuclear Nonproliferation or designee, at the written request of 
a person notified of an alleged violation, may extend in writing, for a 
reasonable period, the time for submitting a reply.
    The proposed rule provides that if a person submits a timely 
written reply to the notice of violation, the Deputy Administrator for 
Defense Nuclear Nonproliferation would make a final determination 
whether the person violated or is continuing to violate a requirement 
of section 57 b., as implemented by Part 810. Based on a determination 
that a person has violated or is continuing to violate such a 
requirement, the Deputy Administrator for Defense Nuclear 
Nonproliferation may issue to that person a final notice of violation 
that concisely states the violation, the amount of the civil penalty 
imposed, further actions necessary by or available to the person, and 
that upon failure to timely pay the civil penalty, the penalty may be 
collected by civil action. The Deputy Administrator for Defense Nuclear 
Nonproliferation would send such a final notice of violation by 
registered or certified mail to the last known address of the person.
    The amount of a civil penalty assessed under this proposed rule 
would be based on: The nature, circumstances, extent, and gravity of 
the violation(s); the violator's ability to pay; the effect of the 
civil penalty on the person's ability to do business; any history of 
prior violations; the degree of culpability; whether the violator self-
disclosed the violation; the economic significance of the violation; 
and such other matters as justice may require.
    Pursuant to proposed Sec.  810.15(c)(6), any person who receives a 
final notice of violation following submission of a timely written 
reply to the original notice of violation may request a hearing 
concerning the allegations contained in the notice. The person would be 
required to mail or deliver any written request for a hearing to the 
Under Secretary for Nuclear Security within 30 calendar days of receipt 
of the final notice of violation. If the person does not request a 
hearing within 30 calendar days, the final notice of violation, 
including any penalties therein, would constitute a final decision and 
payment of the full amount of the civil penalty assessed would be due 
45 calendar days after receipt of the final notice of violation.
    Upon receipt from a person of a written request for a hearing, the 
Under Secretary for Nuclear Security or his/her designee would appoint 
a Hearing Counsel and forward the request for a hearing to the DOE 
Office of Hearings and Appeals (OHA). The OHA Director would appoint an 
OHA Administrative Judge. Under proposed Sec.  810.15(c)(8), the 
Hearing Counsel shall be an attorney employed by DOE and shall have all 
powers necessary to represent DOE before OHA.
    Pursuant to proposed Sec.  810.15(c)(9), in all hearings under the 
proposed rule, the parties have the right to be represented by a person 
of their choosing, subject to possessing an appropriate information 
access authorization for the subject matter, and would be responsible 
for producing witnesses on their behalf, including requesting the 
issuance of subpoenas, if necessary. Testimony of witnesses would be 
given under oath or affirmation, and witnesses must be advised of the 
applicability of 18 U.S.C. 1001 and 1621, dealing with the criminal 
penalties associated with false statements and perjury. Witnesses would 
be subject to cross-examination. Formal rules of evidence would not 
apply, but OHA may use the Federal Rules of Evidence as a guide. A 
court reporter would make a transcript of the hearing.
    In addition, pursuant to proposed Sec.  810.15(c)(9), the 
Administrative Judge would have all powers necessary to regulate the 
conduct of proceedings: (i) The Administrative Judge may order 
discovery at the request of a party, based on a showing that the 
requested discovery is designed to produce evidence regarding a matter, 
not privileged, that is relevant to the subject matter of the 
complaint; (ii) the Administrative Judge may permit parties to obtain 
discovery by any appropriate method, including deposition upon oral 
examination or written questions; written interrogatories; production 
of documents or things; permission to enter upon land or other property 
for inspection and other purposes; and requests for admission; (iii) 
the Administrative Judge may issue subpoenas for the appearance of 
witnesses on behalf of either party, or for the production of specific 
documents or other physical evidence; (iv) the Administrative Judge may 
rule on objections to the presentation of evidence; exclude evidence 
that is immaterial, irrelevant, or unduly repetitious; require the 
advance submission of documents offered as evidence; dispose of 
procedural requests; grant extensions of time; determine the format of 
the hearing; direct that written motions, documents, or briefs be filed 
with respect to issues raised during the course of the hearing; ask 
questions of witnesses; direct that documentary evidence be served upon 
other parties (under protective order if such evidence is deemed 
confidential); and otherwise regulate the conduct of the hearing; (v) 
the Administrative Judge may, at the request of a party or on his or 
her own initiative, dismiss a claim, defense, or party and make adverse 
findings upon the failure of a party or the party's representative to 
comply with a lawful order of the Administrative Judge, or, without 
good cause, to attend a hearing; (vi) the Administrative Judge, upon 
request of a party, may allow the parties a reasonable time to file 
pre-hearing briefs or written statements with respect to material 
issues of fact or law. Any pre-hearing submission must be limited to 
the issues specified and filed within the time prescribed by the 
Administrative Judge; (vii) the parties are entitled to make oral 
closing arguments, but post-hearing submissions are only permitted by 
direction of the Administrative judge; (viii) Parties allowed to file 
written submissions, or documentary evidence must serve copies upon the 
other parties within the timeframe prescribed by the Administrative 
Judge; (ix) the Administrative Judge is prohibited, beginning with his 
or her appointment and until a final agency decision is issued, from 
initiating or otherwise engaging in ex parte (private) discussions with 
any party on the merits of the complaint; (x) the Administrative Judge 
is responsible for determining the date, time, and location of the 
hearing, including whether the hearing will be conducted via video 
conference; and (xi) the Administrative Judge shall convene the hearing 
within 180 days of the OHA's receipt of the request for a hearing, 
unless the parties agree to an extension of this deadline by mutual 
written consent, or the Administrative Judge determines that 
extraordinary circumstances exist that require a delay.
    Under proposed Sec.  810.15(c)(10), hearings shall be open only to 
Hearing Counsel, duly authorized representatives of DOE, the person 
subject to the penalty and the person's counsel or other 
representatives, and such other persons as may be authorized by the 
Administrative Judge. Unless otherwise ordered by the Administrative 
Judge, witnesses shall testify in the presence of the person subject to 
the penalty but not in the presence of other witnesses.

[[Page 52822]]

    Pursuant to proposed Sec.  810.15(c)(11), the Administrative Judge 
must use procedures appropriate to safeguard and prevent unauthorized 
disclosure of classified information or any other information protected 
from public disclosure by law or regulation, with minimum impairment of 
rights and obligations under this part. The classified or otherwise 
protected status of any information shall not, however, preclude its 
being introduced into evidence. The Administrative Judge may issue such 
orders as may be necessary to consider such evidence in camera 
including the preparation of a supplemental recommended decision to 
address issues of law or fact that arise out of that portion of the 
evidence that is classified or otherwise protected.
    The proposed rule provides that the person requesting the hearing 
has the burden of going forward and of demonstrating that the decision 
to impose the civil penalty is not supported by substantial evidence.
    The proposed rule provides that within 180 days of receiving a copy 
of the hearing transcript, or the closing of the record, whichever is 
later, the Administrative Judge shall issue a recommended decision. The 
recommended decision shall contain findings of fact and conclusions 
regarding all material issues of law, as well as the reasons therefor. 
If the Administrative Judge determines that a violation has occurred 
and that a civil penalty is appropriate, the recommended decision shall 
set forth the amount of the civil penalty based on the factors in Sec.  
810.15(c)(5) of the proposed rule.
    Pursuant to proposed Sec.  810.15(c)(14) the Administrative Judge 
shall forward the recommended decision to the Under Secretary for 
Nuclear Security. The Under Secretary for Nuclear Security shall make a 
final decision as soon as practicable after completing his/her review. 
This may include compromising, mitigating, or remitting the penalties 
in accordance with section 234 a. of the AEA, as amended. DOE would 
notify the person of the Under Secretary for Nuclear Security's final 
decision or other action under this paragraph in writing by certified 
mail, return receipt requested. The person against whom the civil 
penalty is assessed by the final decision would be required to pay the 
full amount of the civil penalty assessed in the final decision within 
30 calendar days unless otherwise determined by the Under Secretary for 
Nuclear Security.
    The proposed rule at paragraph (c)(15) provides that if a civil 
penalty assessed in a final decision is not paid as provided in Sec.  
810.15(c)(3), (c)(6) or (c)(14), as appropriate, the Under Secretary 
for Nuclear Security may request the Department of Justice to initiate 
a civil action to collect the penalty imposed under this paragraph in 
accordance with section 234 c. of the AEA, as amended.
    Pursuant to proposed Sec.  810.15(c)(16), the Under Secretary for 
Nuclear Security or his/her designee may publish redacted versions of 
notices of violation and final decisions.

III. Public Comment Procedures

    Interested persons are invited to submit comments on this 
regulatory proposal. Written comments should be submitted to the 
address indicated in the ADDRESSES section of this proposed rule. All 
comments submitted in writing or in electronic form may be made 
available to the public in their entirety. Personal information such as 
your name, address, telephone number, email address, etc., will not be 
removed from your submission. Comments will be available for public 
inspection at http://www.regulations.gov.
    If you submit information that you believe to be exempt by law from 
public disclosure, you should submit one complete copy, as well as one 
copy from which the information claimed to be exempt by law from public 
disclosure has been deleted. DOE is responsible for the final 
determination with regard to disclosure or nondisclosure of the 
information and for treating it accordingly under the DOE Freedom of 
Information regulations at 10 CFR 1004.11.

IV. Regulatory Review

A. Executive Order 12866

    The proposed rule has been determined to be a significant 
regulatory action under Executive Order 12866, ``Regulatory Planning 
and Review,'' 58 FR 51735 (October 4, 1993). Accordingly, this action 
was subject to review under that Executive Order by the Office of 
Information and Regulatory Affairs (OIRA) of the Office of Management 
and Budget (OMB).

B. National Environmental Policy Act

    DOE has determined that the proposed rule is covered under the 
Categorical Exclusion found in DOE's National Environmental Policy Act 
regulations at paragraph A5 of Appendix A to Subpart D, 10 CFR part 
1021, which applies to a rulemaking that amends an existing rule or 
regulation and that does not change the environmental effect of the 
rule or regulation being amended. Accordingly, neither an environmental 
assessment nor an environmental impact statement is required.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process (68 FR 7990). DOE has made its 
procedures and policies available on the Office of the General 
Counsel's website: https://www.energy.gov/gc/office-general-counsel.
    This proposed rule would update 10 CFR 810.15 to include procedures 
for the imposition of civil penalties. DOE has reviewed the proposed 
changes under the provisions of the Regulatory Flexibility Act and the 
procedures and policies published on February 19, 2003. The proposed 
changes do not expand the scope of activities currently regulated under 
10 CFR part 810.
    DOE has conducted a review of the potential small businesses that 
may be impacted by this proposed rule. This review consisted of an 
analysis of the number of businesses impacted generally in Fiscal Years 
2016 and 2017, and a determination of which of those are considered 
``small businesses'' by the Small Business Administration. Small 
businesses impacted by Part 810 generally fall within two North 
American Industry Classification System codes: Engineering services 
(541330) and computer systems designs services (541512). Often, their 
requests for authorization include the transfer of computer codes or 
other similar products. A total of 89 businesses and other entities 
submitted reports and applications pursuant to the regulation during 
this time period. DOE estimates that approximately 10% of those 
entities impacted by Part 810 are small businesses. As such, of those 
89 entities that submitted reports and applications under Part 810, 
approximately 9 are estimated to be small businesses.
    Small businesses exporting nuclear technology like all other 
regulated entities, would be subject to civil penalties for violations 
of Part 810.

[[Page 52823]]

Further, the requirements for small businesses exporting nuclear 
technology would not substantively change because the proposed 
revisions to this rule do not add new burdens or duties to small 
businesses. The obligations of any person subject to the jurisdiction 
of the United States who engages or participates directly or indirectly 
in the production of special nuclear material outside the United States 
have not changed in a manner that would provide any significant 
economic impact on small businesses. Because the proposed changes to 
this rule would not alter the businesses' standards or processes for 
receiving Part 810 authorization, there would be no impact on these 
businesses' ability to comply with Part 810 in the same manner they 
have previously.
    On the basis of the foregoing, DOE certifies that the proposed rule 
would not have a significant economic impact on a substantial number of 
small entities. Accordingly, DOE has not prepared a regulatory 
flexibility analysis for this proposed rulemaking. DOE's certification 
and supporting statement of factual basis will be provided to the Chief 
Counsel for Advocacy of the Small Business Administration pursuant to 5 
U.S.C. 605(b).

D. Paperwork Reduction Act

    The collection of information requirements have been approved under 
OMB Control Number 1901-0263. The proposed rule would provide 
procedures for imposing civil penalties for a violation of Part 810. 
There would be no collection of information under the proposed rule.

E. Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and tribal governments, and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For regulatory actions likely to result in a rule that may cause the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy (2 
U.S.C. 1532(a),(b)). UMRA also requires a Federal agency to develop an 
effective process to permit timely input by elected officers of State, 
local, and tribal governments on a ``significant intergovernmental 
mandate,'' and requires an agency plan for giving notice and 
opportunity for timely input to potentially affected small governments 
before establishing any requirements that might significantly or 
uniquely affect them. On March 18, 1997, DOE published a statement of 
policy on its process for intergovernmental consultation under UMRA. 62 
FR 12820. (This policy is also available at http://energy.gov/gc/office-general-counsel.) DOE examined this proposed rule according to 
UMRA and its statement of policy and has determined that the rule 
contains neither an intergovernmental mandate, nor a mandate that may 
result in the expenditure by State, local, and tribal government, in 
the aggregate, or by the private sector, of $100 million or more in any 
year. Accordingly, no further assessment or analysis is required under 
UMRA.

F. Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. With regard to the review 
required by section 3(a), section 3(b), Executive Order 12988 
specifically requires that Federal agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under guidelines issued by the Attorney 
General. Section 3(c) of Executive Order 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met, or it 
is unreasonable to meet one or more of them. DOE has completed the 
required review and determined that to the extent permitted by law, 
this proposed rule meets the relevant standards of Executive Order 
12988.

G. Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999) 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined this proposed rule and has 
determined that it would not preempt State law and would not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

H. Treasury and General Government Appropriations Act, 1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any proposed rule that may affect family 
well-being. The proposed rule would have no impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy, Supply, Distribution, or Use,'' 66 FR 
28355 (May 22, 2001) requires Federal agencies to prepare and submit to 
OMB a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use. This proposed 
regulatory action would not have a

[[Page 52824]]

significant adverse effect on the supply, distribution, or use of 
energy and is therefore not a significant regulatory action. 
Accordingly, DOE has not prepared a Statement of Energy Effects.

J. Treasury and General Government Appropriations Act, 2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516 note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines 
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed 
today's proposed rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

K. Executive Orders 13771, 13777, and 13783

    On January 30, 2017, the President issued Executive Order 13771, 
``Reducing Regulation and Controlling Regulatory Costs.'' That Order 
stated the policy of the executive branch is to be prudent and 
financially responsible in the expenditure of funds, from both public 
and private sources. The Order stated it is essential to manage the 
costs associated with the governmental imposition of private 
expenditures required to comply with Federal regulations.
    Additionally, on February 24, 2017, the President issued Executive 
Order 13777, ``Enforcing the Regulatory Reform Agenda.'' The Order 
required the head of each agency designate an agency official as its 
Regulatory Reform Officer (RRO). Each RRO oversees the implementation 
of regulatory reform initiatives and policies to ensure that agencies 
effectively carry out regulatory reforms, consistent with applicable 
law. Further, E.O. 13777 requires the establishment of a regulatory 
task force at each agency. The regulatory task force is required to 
make recommendations to the agency head regarding the repeal, 
replacement, or modification of existing regulations, consistent with 
applicable law. At a minimum, each regulatory reform task force must 
attempt to identify regulations that:
    (i) Eliminate jobs, or inhibit job creation;
    (ii) Are outdated, unnecessary, or ineffective;
    (iii) Impose costs that exceed benefits;
    (iv) Create a serious inconsistency or otherwise interfere with 
regulatory reform initiatives and policies;
    (v) Are inconsistent with the requirements of Information Quality 
Act, or the guidance issued pursuant to that Act, in particular those 
regulations that rely in whole or in part on data, information, or 
methods that are not publicly available or that are insufficiently 
transparent to meet the standard for reproducibility; or
    (vi) Derive from or implement Executive Orders or other 
Presidential directives that have been subsequently rescinded or 
substantially modified.
    Finally, on March 28, 2017, the President signed Executive Order 
13783, entitled ``Promoting Energy Independence and Economic Growth.'' 
Among other things, E.O. 13783 requires the heads of agencies to review 
all existing regulations, orders, guidance documents, policies, and any 
other similar agency actions (collectively, agency actions) that 
potentially burden the development or use of domestically produced 
energy resources, with particular attention to oil, natural gas, coal, 
and nuclear energy resources. Such review does not include agency 
actions that are mandated by law, necessary for the public interest, 
and consistent with the policy set forth elsewhere in that order.
    Executive Order 13783 defined burden for purposes of the review of 
existing regulations to mean to unnecessarily obstruct, delay, curtail, 
or otherwise impose significant costs on the siting, permitting, 
production, utilization, transmission, or delivery of energy resources.
    DOE concludes that this proposed rule is consistent with the 
directives set forth in these executive orders. This proposed rule is 
not expected to impose a new regulatory burden, because U.S. persons 
are already required to comply with Part 810. The proposed rule would 
merely detail procedures that DOE would follow in the event that 
section 57 b.(2) of the AEA (42 U.S.C. 2077(b)(2)) and implementing 
regulations at Part 810 are violated.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
rule.

List of Subjects in 10 CFR Part 810

    Foreign relations, Nuclear energy, Reporting and recordkeeping 
requirements.

    Signed in Washington, DC, on September 20, 2019.
Rick Perry,
Secretary of Energy.

    For the reasons set forth in the preamble, the Department of Energy 
proposes to amend part 810 of chapter III, title 10 of the Code of 
Federal Regulations as set forth below.

PART 810--ASSISTANCE TO FOREIGN ATOMIC ENERGY ACTIVITIES

0
1. The authority citation for part 810 is revised to read as follows:

    Authority:  Secs. 57, 127, 128, 129, 161, 222, 232, and 234 AEA, 
as amended by the Nuclear Nonproliferation Act of 1978, Pub. L. 95-
242, 68 Stat. 932, 948, 950, 958, 92 Stat. 126, 136, 137, 138 (42 
U.S.C. 2077, 2156, 2157, 2158, 2201, 2272, 2280, 2282), the 
Intelligence Reform and Terrorism Prevention Act of 2004, Pub. L. 
108-458, 118 Stat. 3768, and sec. 3116 of the John S. McCain 
National Defense Authorization Act for Fiscal Year 2019, Pub. L. 
115-232; Sec. 104 of the Energy Reorganization Act of 1974, Pub. L. 
93-438; Sec. 301, Department of Energy Organization Act, Pub. L. 95-
91; National Nuclear Security Administration Act, Pub. L. 106-65, 50 
U.S.C. 2401 et seq., as amended.

0
2. Section 810.1 is amended by adding paragraph (d) to read as follows:


Sec.  810.1   Purpose.

* * * * *
    (d) Specify civil penalties and enforcement proceedings.
0
3. Section 810.15 is amended by adding paragraph (c) to read as 
follows:


Sec.  810.15  Violations.

* * * * *
    (c) In accordance with section 234 of the AEA, any person who 
violates any provision of section 57 b. of the AEA, as implemented 
under this part, shall be subject to a civil penalty, not to exceed 
$102,522 per violation. If any violation is a continuing one, each day 
from the point at which the violating activity began to the point at 
which the violating activity was suspended shall constitute a separate 
violation for the purpose of computing the applicable civil penalty. 
The mere act of suspending an activity does not constitute admission 
that the activity was a violation and does not waive the rights and 
processes outlined in paragraphs (c)(4) through (c)(14) of this section 
or otherwise impact the right of the person to appeal any civil penalty 
that may be imposed.
    (1) In order to begin a proceeding to impose a civil penalty under 
this paragraph (c), the Deputy Administrator for Defense Nuclear 
Nonproliferation or his/her designee, shall notify the person by a 
written notice of violation sent by registered or certified mail to the 
last known address of such person, of:
    (i) The date, facts, and nature of each act or omission with which 
the person is charged;
    (ii) The particular provision or provisions of section 57 b. of the 
AEA,

[[Page 52825]]

as implemented under this part, involved in each alleged violation;
    (iii) The penalty which DOE proposes to impose;
    (iv) The opportunity of the person to submit a written reply within 
30 calendar days of receipt of such preliminary notice of violation 
showing why such penalty should not be imposed; and
    (v) The possibility of collection by civil action upon failure to 
pay the civil penalty.
    (2) A reply to the notice of violation must:
    (i) State any facts, explanations, and arguments which support a 
denial of the alleged violation;
    (ii) Demonstrate any extenuating circumstances or other reason why 
a proposed penalty should not be imposed or should be mitigated;
    (iii) Discuss the relevant authorities which support the position 
asserted;
    (iv) Furnish full and complete answers to any questions set forth 
in the notice of violation; and
    (v) Include copies of all relevant documents.
    (3) If a person fails to submit a written reply within 30 calendar 
days of receipt of a notice of violation, the notice of violation, 
including any penalties therein, constitutes a final decision, and 
payment of the full amount of the civil penalty assessed in the notice 
of violation is due 30 calendar days after receipt of the notice of 
violation. Such failure to submit a reply constitutes a waiver of the 
rights and processes outlined in paragraphs (c)(4) through (c)(14) of 
this section.
    (4) The Deputy Administrator for Defense Nuclear Nonproliferation 
or his/her designee, at the written request of a person notified of an 
alleged violation, may extend in writing, for a reasonable period, the 
time for submitting a reply.
    (5) If a person submits a timely written reply to the notice of 
violation, the Deputy Administrator for Defense Nuclear 
Nonproliferation will make a final determination whether the person 
violated or is continuing to violate a requirement of section 57 b. of 
the AEA, as implemented under this part. Based on a determination that 
a person has violated or is continuing to violate a requirement of 
section 57 b., as implemented under this part, the Deputy Administrator 
for Defense Nuclear Nonproliferation may issue to that person a final 
notice of violation that concisely states the violation, the amount of 
the civil penalty imposed, further actions necessary by or available to 
the person, and that upon failure to timely pay the civil penalty, the 
penalty may be collected by civil action. The Deputy Administrator for 
Defense Nuclear Nonproliferation will send such a final notice of 
violation by registered or certified mail to the last known address of 
the person. The amount of the civil penalty will be based on:
    (i) The nature, circumstances, extent, and gravity of the violation 
or violations;
    (ii) The violator's ability to pay;
    (iii) The effect of the civil penalty on the person's ability to do 
business;
    (iv) Any history of prior violations;
    (v) The degree of culpability;
    (vi) Whether the violator self-disclosed the violation;
    (vii) The economic significance of the violation; and
    (viii) Such other factors as justice may require.
    (6) Any person who receives a final notice of violation under 
paragraph (c)(5) of this section may request a hearing concerning the 
allegations contained in the notice. The person must mail or deliver 
any written request for a hearing to the Under Secretary for Nuclear 
Security within 30 calendar days of receipt of the final notice of 
violation. If the person does not request a hearing within 30 calendar 
days, the final notice of violation, including any penalties therein, 
constitutes a final decision, and payment of the full amount of the 
civil penalty assessed in the final notice of violation is due 45 
calendar days after receipt of the final notice of violation.
    (7) Upon receipt from a person of a written request for a hearing, 
the Under Secretary for Nuclear Security or his/her designee, shall:
    (i) Appoint a Hearing Counsel; and
    (ii) Forward the request to the DOE Office of Hearings and Appeals 
(OHA). The OHA Director shall appoint an OHA Administrative Judge to 
preside at the hearing.
    (8) The Hearing Counsel shall be an attorney employed by DOE, and 
shall have all powers necessary to represent DOE before the OHA.
    (9) In all hearings under this paragraph (c):
    (i) The parties have the right to be represented by a person of 
their choosing, subject to possessing an appropriate information access 
authorization for the subject matter. The parties are responsible for 
producing witnesses on their behalf, including requesting the issuance 
of subpoenas, if necessary;
    (ii) Testimony of witnesses is given under oath or affirmation, and 
witnesses must be advised of the applicability of 18 U.S.C. 1001 and 18 
U.S.C. 1621, dealing with the criminal penalties associated with false 
statements and perjury;
    (iii) Witnesses are subject to cross-examination;
    (iv) Formal rules of evidence do not apply, but OHA may use the 
Federal Rules of Evidence as a guide; and
    (v) A court reporter will make a transcript of the hearing.
    (vi) The Administrative Judge has all powers necessary to regulate 
the conduct of proceedings:
    (vii) The Administrative Judge may order discovery at the request 
of a party, based on a showing that the requested discovery is designed 
to produce evidence regarding a matter, not privileged, that is 
relevant to the subject matter of the complaint;
    (viii) The Administrative Judge may permit parties to obtain 
discovery by any appropriate method, including deposition upon oral 
examination or written questions; written interrogatories; production 
of documents or things; permission to enter upon land or other property 
for inspection and other purposes; and requests for admission;
    (ix) The Administrative Judge may issue subpoenas for the 
appearance of witnesses on behalf of either party, or for the 
production of specific documents or other physical evidence;
    (x) The Administrative Judge may rule on objections to the 
presentation of evidence; exclude evidence that is immaterial, 
irrelevant, or unduly repetitious; require the advance submission of 
documents offered as evidence; dispose of procedural requests; grant 
extensions of time; determine the format of the hearing; direct that 
written motions, documents, or briefs be filed with respect to issues 
raised during the course of the hearing; ask questions of witnesses; 
direct that documentary evidence be served upon other parties (under 
protective order if such evidence is deemed confidential); and 
otherwise regulate the conduct of the hearing;
    (xi) The Administrative Judge may, at the request of a party or on 
his or her own initiative, dismiss a claim, defense, or party and make 
adverse findings upon the failure of a party or the party's 
representative to comply with a lawful order of the Administrative 
Judge, or, without good cause, to attend a hearing;
    (xii) The Administrative Judge, upon request of a party, may allow 
the parties a reasonable time to file pre-hearing briefs or written 
statements with respect to material issues of fact or law. Any pre-
hearing submission must be limited to the issues specified and filed 
within the time prescribed by the Administrative Judge;

[[Page 52826]]

    (xiii) The parties are entitled to make oral closing arguments, but 
post-hearing submissions are only permitted by direction of the 
Administrative Judge;
    (xiv) Parties allowed to file written submissions, or documentary 
evidence must serve copies upon the other parties within the timeframe 
prescribed by the Administrative Judge;
    (xv) The Administrative Judge is prohibited, beginning with his or 
her appointment and until a final agency decision is issued, from 
initiating or otherwise engaging in ex parte (private) discussions with 
any party on the merits of the complaint;
    (xvi) The Administrative Judge is responsible for determining the 
date, time, and location of the hearing, including whether the hearing 
will be conducted via video conference; and
    (xvii) The Administrative Judge shall convene the hearing within 
180 days of the OHA's receipt of the request for a hearing, unless the 
parties agree to an extension of this deadline by mutual written 
consent, or the Administrative Judge determines that extraordinary 
circumstances exist that require a delay.
    (10) Hearings shall be open only to Hearing Counsel, duly 
authorized representatives of DOE, the person and the person's counsel 
or other representatives, and such other persons as may be authorized 
by the Administrative Judge. Unless otherwise ordered by the 
Administrative Judge, witnesses shall testify in the presence of the 
person but not in the presence of other witnesses.
    (11) The Administrative Judge must use procedures appropriate to 
safeguard and prevent unauthorized disclosure of classified information 
or any other information protected from public disclosure by law or 
regulation, with minimum impairment of rights and obligations under 
this part. The classified or otherwise protected status of any 
information shall not, however, preclude its being introduced into 
evidence. The Administrative Judge may issue such orders as may be 
necessary to consider such evidence in camera including the preparation 
of a supplemental recommended decision to address issues of law or fact 
that arise out of that portion of the evidence that is classified or 
otherwise protected.
    (12) The person requesting the hearing has the burden of going 
forward and of demonstrating that the decision to impose the civil 
penalty is not supported by substantial evidence.
    (13) Within 180 days of receiving a copy of the hearing transcript, 
or the closing of the record, whichever is later, the Administrative 
Judge shall issue a recommended decision. The recommended decision 
shall contain findings of fact and conclusions regarding all material 
issues of law, as well as the reasons therefor. If the Administrative 
Judge determines that a violation has occurred and that a civil penalty 
is appropriate, the recommended decision shall set forth the amount of 
the civil penalty based on the factors in paragraph (c)(5) of this 
section.
    (14) The Administrative Judge shall forward the recommended 
decision to the Under Secretary for Nuclear Security. The Under 
Secretary for Nuclear Security shall make a final decision as soon as 
practicable after completing his/her review. This may include 
compromising, mitigating, or remitting the penalties in accordance with 
section 234 a. of the AEA, as amended. DOE shall notify the person of 
the Under Secretary for Nuclear Security's final decision or other 
action under this paragraph in writing by certified mail, return 
receipt requested. The person against whom the civil penalty is 
assessed by the final decision shall pay the full amount of the civil 
penalty assessed in the final decision within 30 calendar days unless 
otherwise determined by the Under Secretary for Nuclear Security.
    (15) If a civil penalty assessed in a final decision is not paid as 
provided in paragraphs (c) (3), (c)(6) or (c)(14) of this section, as 
appropriate, the Under Secretary for Nuclear Security may request the 
Department of Justice to initiate a civil action to collect the penalty 
imposed under this paragraph in accordance with section 234 c. of the 
AEA.
    (16) The Under Secretary for Nuclear Security or his/her designee 
may publish redacted versions of notices of violation and final 
decisions.

[FR Doc. 2019-21301 Filed 10-2-19; 8:45 am]
 BILLING CODE 6450-01-P