[Federal Register Volume 86, Number 189 (Monday, October 4, 2021)]
[Rules and Regulations]
[Pages 54615-54620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21121]


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DEPARTMENT OF DEFENSE

Department of the Army

32 CFR Part 507

[Docket ID: USA-2018-HQ-0016]
RIN 0702-AA70


Manufacture, Sale, Wear, and Quality Control of Heraldic Items

AGENCY: Department of the Army, Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: The Department of the Army is finalizing its regulation 
describing the Army Heraldic Quality Control Program and the 
certification process for manufacturers in order to make Military 
Insignia. The rule establishes procedures governing the manufacture, 
commercial sale, reproduction, possession, and wear of military 
decorations, medals, badges, insignia and their components and 
appurtenances also discussed is the five-year renewal period for 
manufacturer certification and insignia authorizations and the 
procedure for authorizing the use of insignia on commercial items.

DATES: This rule is effective on November 3, 2021.

FOR FURTHER INFORMATION CONTACT: Charles V. Mugno, Office of the 
Administrative Assistant to the Secretary of the Army, Director of the 
Institute of Heraldry, (571) 515-0320.

SUPPLEMENTARY INFORMATION:

I. Background

    a. This final rule revises the Department of the Army's (DA) 
regulation, 32 Code of Federal Regulations (CFR) part 507, for 
implementing the Army Heraldic Quality Control Program which was last 
published on May 18, 1998 (63 FR 27208). The revisions being finalized 
include a procedural change to manufacturer certification and insignia 
authorizations which add a five-year renewal period for manufacturer 
certification and insignia authorizations. This change insures the 
manufacturing base is current and insignia is periodically examined for 
quality. The second change is to the approving authority for the use of 
insignia images in commercial items. Pursuant to Title 10 U.S.C. 2260, 
Licensing of intellectual property: Retention of fees, the Secretary of 
the Army established the Army Trademark Licensing Program in 2006, 
formalizing the process for the licensing of marks owned by the 
Department of the Army, including heraldic insignia and other 
collective marks.
    The authorities for this rule are 10 U.S.C. 7594; 15 U.S.C. 1051 et 
seq.; 10 U.S.C. 2260; 18 U.S.C. 701, 704; 36 U.S.C. 901. Title 10 
U.S.C. 7594 grants the Secretary of the Army the authority to design 
flags, insignia, badges, medals, seals, decorations, guidons, 
streamers, finial pieces for flagstaffs, buttons, buckles, awards, 
trophies, marks, emblems, rosettes, scrolls, braids, ribbons, knots, 
tabs, cords and similar items for other military departments and to 
advise other Federal departments and agencies on matters of heraldry. 
Title 15 U.S.C. 1051 et seq. is the statutory basis for the ownership 
and control of trademarks, service marks, certification marks, and 
collective marks. Title 10 U.S.C. 2260 grants the Secretary of the Army 
the authority to license trademarks, service marks, certification 
marks, and collective marks owned or controlled by the Secretary of the 
Army. Title 18 U.S.C. 701 states manufacturing, selling and possession 
of any badge, identification card or insignia prescribed by the head of 
any department or agency of the United States is unlawful unless 
authorized by regulations made pursuant to law. Title 18 U.S.C. 704, 
also known as the ``Stolen Valor Act'' makes it illegal for a person to 
fraudulently claim having received a valor award specified in the Act, 
with the intention of obtaining money, property, or other tangible 
benefit by convincing another that he or she received the award. Title 
36 U.S.C. 901 grants authority to the Secretary of Defense to approve a 
service flag and lapel button for display by members of the immediate 
family of an individual serving in the Armed Forces of the United 
States during any period of war or hostilities in which the armed 
forces are engaged. Persons must apply to the Secretary of Defense for 
a license to manufacture and sell the approved service flag. That 
authority was delegated in DoD Manual 1348.33 to the Secretary of the 
Army. (Available at https://www.esd.whs.mil/Directives/issuances/dodm/.)

II. Summary of Major Provisions

    Subpart A--Introduction. Includes discussion on purpose and 
applicability; references; provides a list of definitions, terms, and 
abbreviations; responsibly; outlines the responsibilities for the 
implementation of the program; statutory authority; identifies and 
defines the applicable statutes.
    Subpart B--Manufacture and Sale of Decorations, Badges, and 
Insignia includes discussion on the process to become a certified 
manufacturer; provides requirements for the certification of insignia; 
discusses process to incorporate designs in commercial articles; 
discusses the possession and wear of decoration, service medal, badge, 
service ribbon, lapel button, or insignia.
    Subpart C--Heraldic Quality Control Program discusses the program 
and the controlled heraldic items that fall under the program and 
identified insignia that are not authorized for commercial sale. This 
subpart also discusses penalties for

[[Page 54616]]

violating the Quality Control Program and how complaints are processed.
    Subpart D--License and Manufacture of the Service Flag and Service 
Lapel Button describes the application process for approval to make the 
Service Flag and Service Lapel Button.

III. Comments and Responses

    The proposed rule was published in the Federal Register on June 12, 
2020 (85 FR 35846-35852) for a 60-day comment period. The Department of 
the Army received 1 comment. The comment was not pertinent to the rule, 
so no action was taken and this rule is being finalized with no changes 
from the proposed rule.

Expected Impact of the Final Rule

    This rule facilitates the Department of the Army Heraldic Quality 
Control Program and the manufacturing of all military decorations, 
medals, badges, insignia and their components and appurtenances. The 
manufacturer certification process requires the manufacturer to submit 
four samples of insignia to show they have the capability to make 
insignia in accordance with government specifications. The submitted 
samples have a negligible value, under ten dollars, and less than five 
manufactures apply each year. The recertification process consists of a 
review of a manufacturer's performance during the certification period. 
There is no cost to the manufacturer for the review and recertification 
process.

B. Regulatory Reviews

Regulatory Flexibility Act
    The Department of the Army does not expect this rule to have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et 
seq., because the rule is not creating any new requirements for 
manufacturers of military insignia.
Unfunded Mandates Reform Act
    The Department of the Army certifies that this action does not 
include a mandate that may result in estimated costs to State, local or 
tribal governments in the aggregate or the private sector of $100 
million or more.
Congressional Review Act, 5 U.S.C. 804(2)
    The Congressional Review Act, 5 U.S.C. 801 et seq., as amended by 
the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. The DoD will submit a report containing 
this rule and other required information to the U.S. Senate, the U.S. 
House of Representatives, and the Comptroller General of the United 
States. A major rule cannot take effect until 60 days after it is 
published in the Federal Register. This final rule is not a ``major 
rule'' as defined by 5 U.S.C. 804(2).
National Environmental Policy Act
    The Department of the Army has determined that this action is not 
covered under the National Environmental Policy Act because the rule is 
not a major Federal action that significantly affects the quality of 
the human environment.
Paperwork Reduction Act
    The Department of the Army has determined that the Paperwork 
Reduction Act does not apply. Manufacturers wanting to be certified 
provide general information already available to the public about the 
company such as name, address, points of contact, contact information 
and the type of insignia they want to produce. Annually, fewer than 
five manufacturers request certification.
Executive Order 12630 (Government Actions and Interference With 
Constitutionally Protected Property Rights)
    The Department of the Army has determined that Executive Order 
12630 does not apply because the rule does not impair private property 
rights.
Executive Order 12866 (Regulatory Planning and Review) and Executive 
Order 13563 (Improving Regulation and Regulatory Review)
    Executive Order 12866 directs 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). In accordance with the 
provisions of Executive Order 12866, this is not significant rule and 
was not reviewed by the Office of Management and Budget.
Executive Order 13045 (Protection of Children From Environmental Health 
Risk and Safety Risks)
    The Department of the Army has determined that Executive Order 
13045 does not apply because this substantive action in rulemaking is 
neither economically significant nor does the action concern 
environment health or safety risks that may disproportionally affect 
children.
Executive Order 13132 (Federalism)
    The Department of the Army has determined that Executive Order 
13132 does not apply because this rule will not have a substantial 
effect on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among various levels of government.

List of Subjects in 32 CFR Part 507

    Decorations, medals, awards.


0
For reasons discussed in the preamble, the Department of the Army 
revises 32 CFR part 507 to read as follows:

PART 507--MANUFACTURE, SALE, WEAR, AND QUALITY CONTROL OF HERALDIC 
ITEMS

Subpart A--Introduction
Sec.
507.1 Purpose.
507.2 References.
507.3 Explanation of abbreviations and terms.
507.4 Responsibilities.
507.5 Statutory authority.
Subpart B--Manufacture and Sale of Decorations, Badges, and Insignia
507.6 Authority to manufacture.
507.7 Certification of controlled heraldic items.
507.8 Authority to sell.
507.9 Reproduction of designs.
507.10 Incorporation of designs or likenesses of approved designs in 
commercial articles.
507.11 Possession and wear.
Subpart C--Heraldic Quality Control Program
507.12 General.
507.13 Controlled heraldic items.
507.14 Articles not authorized for manufacture or commercial sale.
507.15 Violations and penalties.
507.16 Processing complaints of alleged breach of policies.
Subpart D--License and Manufacture of the Service Flag and Service 
Lapel Button
507.17 Authority to manufacture.
507.18 Application for licensing.

    Authority: 10 U.S.C. 7594; 18 U.S.C 701, 704; 36 U.S.C. 901.

Subpart A--Introduction


Sec.  507.1  Purpose.

    This part prescribes the Department of the Army policy governing 
the manufacture, commercial sale, reproduction, possession, and wear of

[[Page 54617]]

military decorations, medals, badges, insignia, and their components 
and appurtenances. It also establishes the Heraldic Quality Control 
Program to improve the appearance of the Army by controlling the 
quality of heraldic items purchased from commercial sources.


Sec.  507.2  References.

    Related publications are listed in paragraphs (a) through (d) of 
this section. (A related publication is merely a source of additional 
information. The user does not have to read it to understand this 
part.)
    (a) Department of Defense Manual 1348.33, Volume 3, Manual of 
Military Decorations and Awards: DoD-Wide Personal Performance and 
Valor Decorations. (Available at https://www.esd.whs.mil/Directives/issuances/dodm/).
    (b) Army Regulation 360-1, Army Public Affairs Program. (Available 
at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
    (c) Army Regulation 670-1, Wear and Appearance of Army Uniforms and 
Insignia. (Available at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
    (d) Army Regulation 840-1, Department of the Army Seal, and Emblem 
and Branch of Service Plaques. (Available at https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).
    (e) Army Regulation 27-60, Intellectual Property. (Available at 
https://armypubs.army.mil/ProductMaps/PubForm/AR.aspx).


Sec.  507.3  Explanation of abbreviations and terms.

    (a) Abbreviations. (1) CFR--Code of Federal Regulations.
    (2) DA--Department of the Army.
    (3) DAASA--Deputy Administrative Assistant to the Secretary of the 
Army.
    (4) DLA--Defense Logistics Agency.
    (5) DUI--Distinctive unit insignia.
    (6) ID--Identification
    (7) MCS--Military Clothing Store.
    (8) RDI--Regimental Distinctive Insignia.
    (9) ROTC--Reserve Officers' Training Corps.
    (10) SSI--Shoulder sleeve insignia.
    (11) TIOH--The Institute of Heraldry.
    (12) U.S.C.--United States Code.
    (b) Terms--(1) Appurtenances. Devices such as stars, letters, 
numerals, or clasps worn on the suspension ribbon of the medal, or on 
the ribbon bar that indicate additional awards, participation in 
specific events, or other distinguishing characteristics of the award.
    (2) Awards. An all-inclusive term that consists of any decoration, 
medal, badge, ribbon, or appurtenance bestowed on an individual or 
unit.
    (3) Badge. An award given to an individual for identification 
purposes or that is awarded for attaining a special skill or 
proficiency. Certain badges are available in full, miniature, and dress 
miniature sizes.
    (4) Cartoon. A drawing, six times actual size, showing placement of 
stitches, color of yarn and number of stitches.
    (5) Certified manufacturer. A manufacturer who demonstrated the 
capability to manufacture controlled heraldic items according to 
Government standards.
    (6) Certificate of authority to manufacture. A certificate 
assigning manufacturers a hallmark and authorizing manufacture of 
heraldic items.
    (7) Decoration. An award given to an individual as a distinctively 
designed mark of honor denoting heroism or meritorious or outstanding 
service or achievement.
    (8) Die. The block of steel that is used to form a metal insignia 
and is the intricate three dimensional reversed design of the insignia 
cut into the surface of a block of steel.
    (9) Hallmark. A distinguishing mark consisting of a letter and 
numbers assigned to certified manufacturers for use in identifying 
manufacturers of insignia.
    (10) Heraldic items. All items worn on the uniform to indicate 
unit, skill, branch, award or identification and for which a design has 
been established by TIOH on an official drawing.
    (11) Heraldic Quality Control Program. A program that improves the 
public image of the Army by controlling the quality of insignia 
purchased from commercial sources.
    (12) Hub. The block of steel that is used to form a die and is the 
intricate three dimensional raised design of the insignia cut into the 
surface of a block of steel.
    (13) Lapel button. A miniature enameled replica of an award, which 
is worn only on civilian clothing.
    (14) Letter of agreement. A letter signed by manufacturers before 
certification, stating that the manufacturer agrees to produce heraldic 
items in accordance with specific requirements.
    (15) Letter of authorization. A letter issued by TIOH that 
authorizes the manufacture of a specific heraldic item after quality 
assurance inspection of a preproduction sample.
    (16) Medal. An award issued to an individual for the performance of 
certain duties, acts, or services, consisting of a suspension ribbon 
made in distinctive colors and from which hangs a medallion.
    (17) Rosette. A lapel device created from gathering the suspension 
ribbon of a medal into a circular shape. The device is worn on the 
lapel of civilian clothing.
    (18) Service medal. An award made to personnel who participated in 
designated wars, campaigns, or expeditions or who have fulfilled 
specified service requirements in a creditable manner.
    (19) Tools. The generic term used for hubs, dies, cartoons, and 
drawings used in the manufacture of heraldic items.
    (20) Unit award. An award made to an operating unit, which is worn 
by members of that unit who participated in the cited action (permanent 
unit award).


Sec.  507.4  Responsibilities.

    The Director of The Institute of Heraldry (TIOH) will--
    (a) Monitor the overall operation of the Heraldic Quality Control 
Program.
    (b) Establish policy and procedures to:
    (1) Certify manufacturers of insignia and plaques.
    (2) Control the manufacture and quality assurance of military 
decorations, the DA seal and emblem, Branch of Service plaques, and 
other heraldic items.
    (3) Grant certificates of authority for the manufacture and 
commercial sale of Service flags and Service lapel buttons.
    (4) Provide heraldic services to the Executive branch, Department 
of Defense, and other Federal agencies on a reimbursable basis.
    (5) Provide advisory opinions on the use of Army heraldic items for 
licensing or other commercial purposes (for example, the Army Emblem, 
Army Flag, unit insignia, and items approved for wear on uniforms), at 
the request of the Army Trademark Licensing Program.


Sec.  507.5  Statutory authority.

    (a) The manufacture, commercial sale, possession, and reproduction 
of badges, identification cards, insignia, or other designs prescribed 
by the head of a U.S. department or agency, or colorable imitations of 
them, are governed by Title 18, United States Code, section 701 (18 
U.S.C. 701).
    (b) The wear, manufacture, and commercial sale of military 
decorations, medals, badges, and their components and appurtenances, or 
colorable imitations thereof, are governed by 18 U.S.C. 704.
    (c) The Army's providing heraldic services to other Military 
departments and Federal agencies is governed by 10 U.S.C. 7594.

[[Page 54618]]

    (d) The display of and license to manufacture and sell the approved 
Service flag or Service lapel button is governed by 36 U.S.C. 901.
    (e) The ownership and licensing of trademarks, service marks, and 
collective marks such as DUI, RDI, SSI, and other Army-owned heraldic 
insignia are governed by 15 U.S.C. 1051 et seq., and 10 U.S.C. 2260.

Subpart B--Manufacture and Sale of Decorations, Badges, and 
Insignia


Sec.  507.6  Authority to manufacture.

    (a) Only manufacturers that TIOH has certified and has issued a 
certificate of authority to may produce heraldic items.
    (1) TIOH will issue a certificate of authority to manufacturers who 
can demonstrate they have the capability to manufacture controlled 
heraldic items according to Government specifications or purchase 
descriptions through the certification process.
    (2) The certificate of authority to manufacture is applicable only 
for the individual, firm, or corporation indicated and will be valid 
for 5 years.
    (3) TIOH will assign a hallmark to each certified manufacturer. All 
controlled heraldic items manufactured for commercial sale will bear 
the manufacturer's hallmark.
    (4) TIOH exclusively uses the ``IOH'' hallmark for the development 
of new controlled heraldic items; it is not authorized for use on items 
for commercial sale.
    (b) A certificate of authority to manufacture may be revoked or 
suspended under the procedures prescribed in Sec.  507.16.
    (c) A list of certified manufacturers is on the TIOH web page at 
https://tioh.army.mil/.


Sec.  507.7  Certification of controlled heraldic items.

    (a) The manufacture and commercial sale of controlled heraldic 
items are not authorized until the certified manufacturer receives a 
letter of authorization from TIOH. Manufacturers who want to 
manufacture and sell controlled heraldic items must submit four 
production samples of each item to TIOH for authorization. If TIOH 
approves the production samples, it will provide a letter of 
authorization to manufacture along with one certified production sample 
to the manufacturer. Letters of authorization for certified heraldic 
items are valid for 5 years.
    (b) The Director of TIOH may revoke or suspend a letter of 
authorization for failure to manufacture the heraldic item in 
accordance with applicable Government specifications.


Sec.  507.8  Authority to sell.

    No certificate of authority to manufacture is required for selling 
controlled heraldic items listed in Sec.  507.13. However, all sellers 
must ensure that all articles they sell bear hallmarks assigned by TIOH 
and are manufactured by certified manufacturers in conformance with 
applicable Government specifications.


Sec.  507.9  Reproduction of designs.

    (a) The photographing or printing of any decoration, service medal, 
service ribbon, badge, lapel button, insignia, or other device of a 
design the Secretary of the Army has prescribed for members of the Army 
to use is authorized, provided that such reproduction does not 
discredit the U.S. Army and is not used to defraud or misrepresent the 
identification or status of an individual, organization, society, or 
other group of persons.
    (b) The making or executing in any manner of any engraving, 
impression, or colorable imitation in the likeness of any decoration, 
service medal, service ribbon, badge, lapel button, insignia, or other 
device of a design the Secretary of the Army has prescribed for members 
of the Army to use is prohibited without prior approval in writing from 
the Army Trademark Licensing Program.
    (c) Except when used to illustrate a particular article that is 
offered for commercial sale, Army Regulation 360-1, paragraph 8-9e, 
prohibits the use of Army themes, material, uniforms, or insignia in 
advertisements and promotions for entertainment-oriented products that 
could imply Army endorsement of the product. Direct requests to the 
Chief, Public Affairs (SAPA-ZA), 1500 Army Pentagon, Washington, DC 
20310-1500.


Sec.  507.10   Incorporation of designs or likenesses of approved 
designs in commercial articles.

    (a) Federal law and Army policy restrict the use of military 
designs. The manufacture of articles for commercial sale that 
incorporate designs or likenesses of decorations, service medals, 
service ribbons, and lapel buttons is prohibited. Certain designs or 
likenesses of insignia, such as badges or organizational insignia, may 
be incorporated in articles manufactured for commercial sale, provided 
that the Army Trademark Licensing Program has granted permission in 
writing as specified in paragraph (b) of this section.
    (b) The Army Trademark Licensing Program is responsible for 
reviewing requests for permission to incorporate certain insignia and 
other Army-owned marks in articles manufactured for commercial sale. 
Requests should be directed to the Director, Army Trademark Licensing 
Program, 2530 Crystal Drive, Suite 12140, Arlington, VA 22202-3934.


Sec.  507.11  Possession and wear.

    (a) The wearing of any decoration, service medal, badge, service 
ribbon, lapel button, or insignia that the Army has prescribed or 
authorized by any person not properly authorized to wear such device or 
the use of any decoration, service medal, badge, service ribbon, lapel 
button, or insignia to misrepresent the identification or status of the 
person by whom such is worn is prohibited. Any person who violates this 
paragraph (a) is subject to punishment as prescribed in the statutes 
referred to in Sec.  507.5.
    (b) Mere possession by a person of any of the articles prescribed 
in Sec.  507.13 (except identification cards) is authorized, provided 
that such possession is not used to defraud or misrepresent the 
identification or status of the individual concerned.
    (c) Articles specified in Sec.  507.13, or any distinctive parts 
(including suspension ribbons and service ribbons) or colorable 
imitations thereof, will not be used by any organization, society, or 
other group of persons without prior approval in writing by the Army 
Trademark Licensing Program as specified in Sec.  507.10(b).

Subpart C--Heraldic Quality Control Program


Sec.  507.12  General.

    The Heraldic Quality Control Program provides a method for ensuring 
that controlled heraldic items are manufactured by certified 
manufacturers in accordance with Government specifications. The design 
of metal insignia will be an exact duplicate of the design of the 
Government die or loaned hub from which the certified manufacturer's 
working die is extracted. The design of textile insignia will be 
embroidered in accordance with Government-furnished specification and 
cartoon.


Sec.  507.13   Controlled heraldic items.

    (a) Controlled heraldic items will be manufactured in accordance 
with Government specifications, using Government loaned hubs, dies, or 
cartoons, by TIOH-certified manufacturers.
    (b) The heraldic items listed in paragraphs (b)(1) through (13) of 
this section are controlled and authorized for manufacture and 
commercial sale

[[Page 54619]]

under the Heraldic Quality Control Program when specifically authorized 
by TIOH.
    (1) All authorized appurtenances and devices for decorations, 
medals, and ribbons such as oak leaf clusters, service stars, 
arrowheads, ``V'' device, and clasps.
    (2) Combat, special skill, and qualification badges and bars.
    (3) Identification badges.
    (4) All approved Shoulder Sleeve Insignia.
    (5) All approved Distinctive Unit Insignia.
    (6) All approved Regimental Distinctive Insignia.
    (7) All approved Combat Service Identification Badges.
    (8) Fourrag[egrave]res and lanyards.
    (9) Lapel buttons.
    (10) Decorations, service medals, and ribbons, except for the Medal 
of Honor.
    (11) Replicas of decorations and service medals for grave markers. 
Replicas are to be at least twice the size prescribed for decorations 
and service medals.
    (12) Service ribbons and unit awards.
    (13) Rosettes, except for the Medal of Honor.
    (c) Deviations from the prescribed specifications for the items 
listed in paragraph (b) of this section are not permitted without prior 
approval, in writing, by TIOH.
    (d) Hubs, dies, and cartoons are not provided to manufacturers for 
the following items. However, manufacturing will be in accordance with 
the Government-furnished drawing.
    (1) Shoulder Loop Insignia, Reserve Officers' Training Corps 
(ROTC), U.S. Army.
    (2) Institutional SSI, ROTC, U.S. Army.
    (3) Background trimming/flashes, U.S. Army.
    (4) Hand-embroidered bullion insignia.


Sec.  507.14  Articles not authorized for manufacture or commercial 
sale.

    The following articles are not authorized for manufacture and 
commercial sale, except under contract with the Defense Logistics 
Agency, Troop Support (DLA Troop Support):
    (a) The Medal of Honor.
    (b) Service ribbon for the Medal of Honor.
    (c) Medal of Honor Rosette.
    (d) Medal of Honor Flag.
    (e) Military Department Service flags (prescribed in Army 
Regulation 840-10).
    (f) Articles for commercial sale that incorporate designs or 
likenesses of insignia listed in Sec.  507.13, except when authorized 
in writing by the Army Trademark Licensing Program as specified in 
Sec.  507.10(b).


Sec.  507.15  Violations and penalties.

    (a) TIOH will revoke a certificate of authority to manufacture when 
the holder intentionally violates any of the provisions of this part or 
does not comply with the agreement the manufacturer signed to receive a 
certificate.
    (b) Violations are also subject to penalties as prescribed in the 
statutes referred to in Sec.  507.5.
    (c) Repetition or continuation of violations after official notice 
will be deemed as corroborating evidence of intentional violation.


Sec.  507.16  Processing complaints of alleged breach of policies.

    (a) Suspension or revocation of a certificate of authority to 
manufacture. TIOH may suspend or revoke a certificate of authority to 
manufacture if the manufacturer breaches quality control policies. The 
term ``quality control policies'' includes the obligation of a 
manufacturer to produce insignia in accordance with all applicable 
Government specifications, manufacturing drawings, and cartoons and 
other applicable instructions TIOH provided. Breaches of quality 
control policies may be identified by TIOH through the Quality Control 
Inspection Program or through registered complaints to TIOH.
    (b) Reporting alleged breach of quality control. Complaints and 
reports of an alleged breach of quality control policies will be 
forwarded to the Director, The Institute of Heraldry, 9325 Gunston 
Road, Room S113, Fort Belvoir, VA 22060-5579.
    (c) Informal investigation of allegations. The Director may decide 
to suspend or revoke a certificate of authority to a manufacture based 
on evidence gathered during a TIOH heraldic quality control inspection 
or from a registered complaint. The Director may initiate an informal 
investigation of an allegation of breach(es) of the heraldic quality 
control policy.
    (d) Heraldic Quality Control Inspection Program. (1) TIOH will 
conduct periodic quality control inspections of on hand stocks of 
heraldic items maintained by:
    (i) Exchange military clothing stores.
    (ii) Certified manufacturers.
    (2) Upon completion of quality control inspections, TIOH will 
provide a report of deficiencies to the appropriate retail outlet or 
Commander, DLA Troop Support, and the certified manufacturer 
responsible for the production of the item. The notification to the 
manufacturer will require assurances of compliance with quality control 
policies. The report of deficiencies will be reviewed upon 
recertification of the manufacturer. Any recurrence of the same breach 
will be considered a refusal to perform, and the Director will take 
further action to suspend or revoke certification.
    (e) Complaint of alleged breach of quality control policy. (1) If 
an investigation is initiated, the appointed investigator will 
impartially ascertain facts and gather appropriate evidence to 
substantiate or invalidate allegations of impropriety. The investigator 
will submit a report containing a summarized record of the 
investigation with findings of each allegation and supporting evidence 
to the Director.
    (2) If the investigation substantiates allegation(s) of a breach of 
quality control, the Director will notify the manufacturer in writing 
that the Director is contemplating suspending or revoking the 
certificate. The notification will include:
    (i) The specific allegations and findings of the investigator;
    (ii) All evidence provided to the Director in the investigation;
    (iii) A citation to this part as the authority under which the 
Director may suspend or revoke the certificate of authority if the 
situation warrants after the manufacturer has had an opportunity to 
reply;
    (iv) What actions, if the allegations are undisputed, are required 
to provide adequate assurance that future performance will conform to 
quality control policies;
    (v) The right to reply within 45 days of receipt of the 
notification in order to submit additional materials and evidence for 
consideration, to refute the allegations, or provide assurances that 
future performance will conform to quality control policies; and
    (vi) That a failure to reply within 45 days, or if there is any 
recurrence of the same breach will be considered a refusal to perform, 
and the Director will take further action to suspend or revoke 
certification.
    (f) Refusal to perform. (1) If the manufacturer fails to reply 
within a reasonable time to the letter authorized by paragraph (e) of 
this section, refuses to give adequate assurances that future 
performance will conform to quality control policies, indicates by 
subsequent conduct that the breach is continuous or repetitive, or 
disputes the allegations of breach, the Director will

[[Page 54620]]

direct that a public hearing be conducted on the allegations.
    (2) A hearing examiner will be appointed by appropriate orders. The 
examiner may be either a commissioned officer or a civilian employee 
above the grade of GS-7.
    (3) The specific written allegations, together with other pertinent 
material, will be transmitted to the hearing examiner for introduction 
as evidence at the hearing.
    (4) For failure to return a loaned tool, manufacturers may be 
suspended without referral to a hearing specified in paragraph (f)(1) 
of this section; however, the manufacturer will be advised, in writing, 
that tools are overdue and suspension will take effect if tools are not 
returned within the specified time.
    (g) Notification to the manufacturer by examiner. Within a 7-day 
period following the receipt by the examiner of the allegations and 
other pertinent material, the examiner will transmit a registered 
letter of notification to the manufacturer informing him or her of 
the--
    (1) Specific allegations.
    (2) Directive of the Director requiring the holding of a public 
hearing on the allegations.
    (3) Examiner's decision to hold the public hearing at a specific 
time, date, and place that will be not earlier than 30 days from the 
date of the letter of notification.
    (4) Ultimate authority of the Director to suspend or revoke the 
certificate of authority if the record developed at the hearing so 
warrants.
    (5) Right to--
    (i) A full and fair public hearing.
    (ii) Be represented by counsel during the hearing at no cost to the 
Government.
    (iii) Request a change in the date, time, or place of the hearing, 
for purposes of having reasonable time in which to prepare the case.
    (iv) Submit evidence and present witnesses in his or her own 
behalf.
    (v) Obtain at no cost a verbatim transcript of the proceedings, 
upon written request filed before the commencement of the hearing.
    (h) Public hearing by examiner. (1) At the time, date, and place 
designated in accordance with paragraph (g)(3) of this section, the 
examiner will conduct the public hearing.
    (i) A verbatim record of the proceedings will be maintained.
    (ii) All previous material received by the examiner will be 
introduced into evidence and made part of the record.
    (iii) The Government may be represented by counsel at the hearing.
    (2) Subsequent to the conclusion of the hearing, the examiner will 
make specific findings on the record before him or her concerning each 
allegation.
    (3) The complete record of the case will be forwarded to the 
Director.
    (i) Action by the Director. (1) The Director will review the record 
of the hearing and either approve or disapprove the findings.
    (2) Upon arrival of a finding of breach of quality control 
policies, the manufacturer will be so advised.
    (3) After review of the findings, the certificate of authority may 
be revoked or suspended. If the certificate of authority is revoked or 
suspended, the Director will--
    (i) Notify the manufacturer of the revocation or suspension.
    (ii) Remove the manufacturer from the list of certified 
manufacturers.
    (iii) Inform the Army & Air Force Exchange Service (AAFES) and the 
Defense Logistics Agency-Troop Support of the action.
    (j) Reinstatement of certificate of authority. Upon receipt of 
adequate assurance that the manufacturer will comply with quality 
control policies, the Director may reinstate a certificate of authority 
that has been suspended or revoked.

Subpart D--License and Manufacture of the Service Flag and Service 
Lapel Button


Sec.  507.17  Authority to manufacture.

    (a) The Secretary of Defense has designated the Secretary of the 
Army to grant certificates of authority for the manufacture and 
commercial sale of Service flags and Service lapel buttons.
    (b) Any person, firm, or corporation that wishes to manufacture the 
Service flag or lapel button must apply for a certificate of authority 
to manufacture from TIOH.


Sec.  507.18  Application for licensing.

    (a) Applicants who want to manufacture and sell Service flags or 
Service lapel buttons should contact the Director, The Institute of 
Heraldry, 9325 Gunston Road, Room S113, Fort Belvoir, VA 22060-5579, to 
obtain an agreement to manufacture, drawings, and instructions for 
manufacturing the Service flag and Service lapel button.
    (b) Certificates of authority to manufacture Service flags and 
Service lapel buttons will be valid for 5 years from the date of 
issuance, at which time applicants must reapply for a new certificate 
of authority.

James W. Satterwhite Jr.,
Army Federal Register Liaison Officer.
[FR Doc. 2021-21121 Filed 10-1-21; 8:45 am]
BILLING CODE 5061-AP-P