Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 60083

Regulations Branch, Office of 

Regulations and Rulings, U.S. Customs 

and Border Protection. However, 

personnel from other offices 

participated in its development.

List of Subjects in 19 CFR Part 191 

Claims, Commerce, CBP duties and 

inspection, Drawback.

Amendments to the Regulations

■ For the reasons stated above, part 191 

of the CBP Regulations (19 CFR part 191) 

is amended as follows:

PART 191 — DRAWBACK

■ 1. The general authority citation for 

part 191 continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 

(General Note 23, Harmonized Tariff 

Schedule of the United States), 1313, 1624.

■ 2. Section 191.3(a)(4) and (b)(2) are 

revised as follows:

§ 191.3 Duties and fees subject or not 

subject to drawback. 

(a) Duties and fees subject to 

drawback include:

* * * * *

(4) Merchandise processing fees (see 

§ 24.23 of this chapter) for unused 

merchandise drawback pursuant to 19 

U.S.C. 1313(j), and drawback for 

substitution of finished petroleum 

derivatives pursuant to 19 U.S.C. 

1313(p)(2)(A)(iii) or (iv). 

(b) * * *

(2) Merchandise processing fees (see

§ 24.23 of this chapter), except where 

unused merchandise drawback pursuant 

to 19 U.S.C. 1313(j) or drawback for 

substitution of finished petroleum 

derivatives pursuant to 19 U.S.C. 

1313(p)(2)(A)(iii) or (iv) is claimed; and

* * * * *

■ 3. In § 191.51, paragraph (b)(2) 

introductory text is revised to read as 

follows:

§ 191.51 Completion of drawback claims.

* * * * *

(b) * * *

(2) Merchandise processing fee 

apportionment calculation. Where a 

drawback claimant seeks unused 

merchandise drawback pursuant to 19 

U.S.C. 1313(j), or drawback for 

substitution of finished petroleum 

derivatives pursuant to 19 U.S.C. 

1313(p)(2)(A)(iii) or (iv), for a 

merchandise processing fee paid 

pursuant to 19 U.S.C. 58c(a)(9)(A), the 

claimant is required to correctly 

apportion the fee to that merchandise 

that provides the basis for drawback 

when calculating the amount of 

drawback requested on the drawback 

entry. This is determined as follows:

* * * * *

■ 4. In § 191.171, a new paragraph (c) is 

added to read as follows:

§ 191.171 General; drawback allowance.

* * * * *

(c) Merchandise processing fees. In 

cases where the requirements of 

paragraph (b)(1) of this section have 

been met, merchandise processing fees 

will be eligible for drawback.

Approved: October 4, 2004. 

Robert C. Bonner, 

Commissioner, U.S. Customs and Border 

Protection. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury.

[FR Doc. 04–22599 Filed 10–6–04; 8:45 am] 

BILLING CODE 4820–02–P

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Parts 1 and 3 

RIN 2900–AM09 

Presumptions of Service Connection 

for Diseases Associated With Service 

Involving Detention or Internment as a 

Prisoner of War

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

SUMMARY: The Department of Veterans 

Affairs (VA) is issuing this interim final 

rule to establish guidelines for 

establishing presumptions of service 

connection for diseases associated with 

service involving detention or 

internment as a prisoner of war. In 

accordance with those guidelines, this 

interim final rule also establishes 

presumptions of service connection for 

atherosclerotic and hypertensive heart 

disease and for stroke disease arising in 

former prisoners of war. These rules are 

necessary because claims based on 

service involving detention or 

internment as a prisoner of war present 

unique medical issues and because 

factors including the lack of 

contemporaneous medical records 

during periods of captivity and the 

relatively small body of available 

medical information present obstacles to 

substantiating claims for serviceconnected benefits based on prisoner-ofwar service. By establishing guidelines 

for identifying diseases associated with 

service involving detention or 

internment as a prisoner of war, these 

rules will help VA to ensure that claims 

for service-connected benefits for 

disability or death of former prisoners of 

war are decided fairly, consistently, and 

based on all available medical 

information concerning the diseases 

associated with detention or internment 

as a prisoner of war.

DATES: This interim final rule is 

effective October 7, 2004. Comments 

must be received on or before November 

8, 2004.

ADDRESSES: Written comments may be 

submitted by: mail or hand-delivery to 

Director, Regulations Management 

(00REG1), Department of Veterans 

Affairs, 810 Vermont Ave., NW., Room 

1068, Washington, DC 20420; fax to 

(202) 273–9026; e-mail to 

VAregulations@mail.va.gov; or, through 

http://www.Regulations.gov. Comments 

should indicate that they are submitted 

in response to ‘‘RIN 2900–AM09.’’ All 

comments received will be available for 

public inspection in the Office of 

Regulation Policy and Management, 

Room 1063B, between the hours of 8 

a.m. and 4:30 p.m., Monday through 

Friday (except holidays). Please call 

(202) 273–9515 for an appointment.

FOR FURTHER INFORMATION CONTACT:

David Barrans, Deputy Assistant 

General Counsel (022D), Office of 

General Counsel, Department of 

Veterans Affairs, 810 Vermont Avenue, 

NW., Washington, DC 20420, (202) 273–

6332.

SUPPLEMENTARY INFORMATION: VA is 

revising its regulations to include a new 

provision, codified at 38 CFR 1.18, 

establishing guidelines for determining 

whether to establish new presumptions 

of service connection for any disease 

associated with service involving 

detention or internment as a prisoner of 

war. VA is also amending its 

adjudication regulations at 38 CFR 

3.309(c) to add atherosclerotic heart 

disease or hypertensive vascular disease 

and stroke to the list of diseases VA will 

presume to be associated with service 

involving detention or internment as a 

prisoner of war (POW), and to reflect 

statutory changes. These new 

presumptions of service connection 

reflect VA’s determination that 

presumptions for heart disease and 

stroke are warranted by application of 

the guidelines set forth in § 1.18. 

Guidelines for Identifying POW 

Presumptive Conditions 

Statutory and regulatory standards 

currently exist to guide VA in 

identifying diseases associated with 

exposure to herbicide agents, hazards of 

service in the Gulf War, and ionizing 

radiation. See 38 U.S.C. 1116 and 1118; 

38 CFR 1.17. VA has determined that it 

would be helpful to establish standards 

to guide VA in identifying diseases 

60084 Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 

associated with service involving 

detention or internment as a POW and 

establishing new presumptions of 

service connection for such diseases. 

We are establishing a new provision at 

38 CFR 1.18 setting forth guidelines for 

such determinations. The guidelines are 

substantially similar to the abovereferenced existing guidelines, with 

minor differences necessary to reflect 

considerations unique to former POWs. 

VA is authorized to provide 

compensation and other benefits for 

disability or death due to disease or 

injury incurred in or aggravated by 

service. To establish service connection 

for a disease or injury, a claimant 

ordinarily must provide evidence, with 

VA’s assistance, establishing that the 

claimed disease or injury was incurred 

in or aggravated by service. Statutory 

and regulatory presumptions of service 

connection relieve claimants of this 

evidentiary burden in certain 

circumstances by directing VA 

adjudicators to presume that certain 

diseases were incurred in or aggravated 

by service unless evidence shows 

otherwise. These presumptions are 

generally based on scientific and 

medical data that provide a basis for 

inferring a connection between a 

particular disease and some 

circumstance regarding the veteran’s 

service. 

Evidentiary presumptions of service 

connection serve a number of purposes. 

By codifying medical findings and 

principles that otherwise may not be 

familiar to VA adjudicators, they 

promote the efficient resolution of 

issues of service connection without the 

need for case-by-case investigation and 

interpretation of the available medical 

literature. They promote fair and 

consistent decision making by 

establishing simple adjudicatory rules to 

govern the claims of similarly situated 

veterans. They also may assist claimants 

who would otherwise face substantial 

difficulties in obtaining direct proof of 

service connection due to the 

complexity of the factual issues, the lack 

of contemporaneous medical records 

during service, or other circumstances. 

Currently, 38 U.S.C. 1112(b) 

establishes presumptions of service 

connection for sixteen categories of 

disease that are deemed to be associated 

with detention or internment as a POW. 

Eleven of those conditions are presumed 

to be service connected only if the 

veteran was detained or interned for a 

period of at least thirty days, and the 

remaining five are presumed to be 

service connected if the veteran was 

detained or interned for any period. 

The Secretary of Veterans Affairs is 

authorized by 38 U.S.C. 501(a) to 

prescribe all rules and regulations that 

are necessary or appropriate to carry out 

the laws administered by VA, including 

regulations with respect to the nature 

and extent of proof necessary to 

establish entitlement to benefits under 

such laws. Pursuant to that authority, 

the Secretary may establish reasonable 

evidentiary presumptions of service 

connection for diseases. The Secretary 

has determined that presumptions of 

service connection are particularly 

appropriate for former POWs. 

Veterans who were detained or 

interned as POWs generally were 

subjected to unique hardships including 

malnutrition, torture, physical and 

psychological abuse, and a lack of 

adequate medical care. Although POW 

experiences have varied with time, 

place, and other factors, certain 

hardships are so prevalent across the 

spectrum of POW experience as to 

support the presumption that POWs as 

a group have incurred similar health 

risks. The lack of contemporaneous 

personnel and health records to 

document events, injuries, or diseases 

during periods of captivity also provides 

a strong justification for relying on 

evidentiary presumptions rather than 

requiring direct proof of service 

connection. Further, presumptions may 

simplify and expedite the claims 

adjudication process, a particularly 

significant consideration for former 

POWs, more than ninety percent of 

whom served in World War II and are 

now, on average, over eighty years old.

Additionally, although several health 

effects associated with prisoner-of-war 

experiences are well known and 

reflected in existing presumptions of 

service connection, determining 

whether other health effects may be 

associated with prisoner-of-war 

experience is not a simple task. This is 

due in part to the discrete nature of the 

POW experience. The effects of certain 

other service-related risk factors such as 

exposure to ionizing radiation or 

herbicide agents have been extensively 

studied in relation to exposures 

occurring in occupational and other 

civilian settings in addition to studies of 

veteran populations. In contrast, the 

effects of the POW experience have been 

less extensively studied, because there 

generally are not comparable civilian 

populations and the number of former 

POWs available for study is 

comparatively small. Although studies 

of former POWs do exist, the limited 

amount of information available 

complicates the task of identifying 

diseases associated with the POW 

experience. In view of these 

circumstances, VA has determined that 

it is appropriate to establish guidelines 

for VA’s review of the medical evidence 

concerning the association between the 

POW experience and particular diseases 

and to establish presumptions of service 

connection when the evidence 

reasonably establishes an association. 

We are setting forth the guidelines VA 

will apply in a new regulation at 38 CFR 

1.18. Paragraph (a) of § 1.18 states VA’s 

policy to establish presumptions of 

service connection for former POWs 

when necessary to prevent denials of 

benefits in significant numbers of 

meritorious claims. 

Paragraph (b) of § 1.18 states the 

standard VA will apply in determining 

whether a presumption of service 

connection is warranted. That paragraph 

states that the Secretary may establish a 

presumption of service connection for a 

disease when there is ‘‘at least limited/

suggestive evidence that an increased 

risk of such disease is associated with 

service involving detention or 

internment as a prisoner of war and an 

association between such detention or 

internment and the disease is 

biologically plausible.’’ We define the 

term ‘‘limited/suggestive evidence’’ in 

paragraph (b)(1) to refer to ‘‘evidence of 

a sound scientific or medical nature that 

is reasonably suggestive of an 

association between prisoner-of-war 

experience and the disease, even though 

the evidence may be limited because 

matters such as chance, bias, and 

confounding could not be ruled out 

with confidence or because the 

relatively small size of the affected 

population restricts the data available 

for study.’’ Paragraph (b)(2) states, for 

purposes of illustration, that ‘‘limited/

suggestive evidence’’ may be found 

where one high-quality study detects a 

statistically significant association or 

where several smaller studies detect an 

association that is consistent in 

magnitude and direction. 

The ‘‘limited/suggestive evidence’’

standard is essentially the same 

standard that the Institute of Medicine 

(IOM) of the National Academy of 

Sciences employs in reports it prepares 

for VA analyzing the health effects of 

exposure to herbicide agents. In those 

reports, which are mandated by statute, 

the IOM classifies the association 

between a particular disease and the 

hazard in question as belonging to one 

of the following four categories: 

‘‘Sufficient evidence of an association,’’

‘‘limited/suggestive evidence of an 

association,’’ ‘‘inadequate or insufficient 

evidence to determine whether an 

association exists,’’ and ‘‘sufficient 

evidence of no association.’’ VA has 

established presumptions of service 

connection for each of the diseases the 

IOM has classified as having at least 

Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 60085

‘‘limited/suggestive evidence’’ of an 

association. The ‘‘limited/suggestive 

evidence’’ standard employed by the 

IOM is familiar to VA and has proven 

to be a useful analytical framework for 

assessing scientific evidence and 

determining whether a presumption of 

service connection may be warranted. 

Accordingly, we will use that standard 

for determining when a presumption 

may be warranted for former POWs. 

The IOM defines the ‘‘limited/

suggestive evidence’’ standard to refer to 

circumstances in which evidence is 

suggestive of an association but is 

limited because matters of chance, bias, 

and confounding cannot be ruled out 

with confidence. Our definition adds 

that the evidence may be limited 

because the relatively small size of the 

affected population may restrict the data 

available for study. We believe this 

additional consideration is significant 

with respect to former POWs. As noted 

above, the lack of a comparable civilian 

population for study may limit the 

amount of data available for discerning 

the health effects of the POW 

experience. The data available for study 

are also severely restricted by the fact 

that there is often little or no 

information about veterans’ health 

status or adverse exposures during 

captivity. Moreover, opportunities for 

future studies are increasingly limited 

because the population of surviving 

former POWs, most of whom served in 

World War II, is declining rapidly. 

Although we intend that any 

presumptions VA establishes will be 

based on sound scientific and medical 

evidence, we believe that VA’s analysis 

of the evidence should take account of 

the unique circumstances and 

evidentiary hurdles affecting this 

deserving group of veterans. It may be 

unrealistic to expect the same degree of 

data or the same number of 

corroborative studies that may exist 

with respect to the health effects of 

herbicide exposure or other areas of 

investigation. We believe that fairness to 

former POWs requires that VA fully 

evaluate the available data and not 

accord undue significance to the fact 

that such data are comparatively limited 

by the small size of the affected 

population. 

The requirement that the association 

be biologically ‘‘plausible’’ does not 

require proof of a casual relationship. 

This is further clarified by § 1.18(d), 

discussed below. Rather, it requires only 

a determination that there is a possible 

biological mechanism, consistent with 

sound scientific evidence, by which the 

suspected precipitating event (POW 

experience) could lead to the health 

outcome. The IOM routinely applies the 

concept of biologic plausibility in its 

reviews of the literature concerning the 

health effects of herbicide exposure and 

hazards of Gulf War service and is 

required by statute to consider biologic 

plausibility. See Pub. L. 102–4, 

§ 3(d)(1)(C), and Pub. L. 105–277, 

§ 1603(e)(1)(C). 

Paragraph (c) of § 1.18 states that, in 

establishing a presumption of service 

connection for a disease, the Secretary 

may specify a minimum period of 

detention or internment necessary to 

qualify for the presumption. As noted 

above, some of the current statutory 

presumptions apply only to former 

POWs who were detained or interned 

for a period of at least thirty days. That 

requirement apparently reflects the 

determination that certain conditions, 

such as certain diseases associated with 

vitamin deficiency, ordinarily may arise 

only after a prolonged period of food 

deprivation during confinement. Our 

rule is intended to allow the Secretary 

to establish a similar requirement 

concerning the length of detention or 

internment for new presumptions 

established in the future, if warranted 

by sound scientific or medical evidence. 

Paragraph (d) of § 1.18 explains that 

the requirement in paragraph (b) that a 

disease be ‘‘associated’’ with the POW 

experience may be satisfied by evidence 

demonstrating either a statistical or a 

causal association. Paragraph (e) of the 

rule specifies the types of evidence the 

Secretary will consider in deciding 

whether a presumption is warranted. 

This paragraph makes clear that the 

Secretary need not rely exclusively on 

studies of former POWs, but may 

consider studies concerning the health 

effects of circumstances or hardships 

similar to those experienced by POWs, 

if available, as well as any other sound 

scientific or medical evidence the 

Secretary considers relevant. 

Paragraph (f) of § 1.18 states several 

factors that VA will consider in 

evaluating any scientific study 

concerning diseases possibly associated 

with the POW experience. The specified 

factors are similar to the factors VA 

considers in assessing studies relating to 

herbicide exposure and other hazards. 

See 38 U.S.C. 1116(b)(2) and 

1118(b)(2)(B); 38 CFR 1.17(b).

Paragraph (g) of § 1.18 states that the 

Secretary may contract with an 

appropriate expert body, such as the 

IOM, to review and summarize the 

scientific evidence or for any other 

purpose relevant to the Secretary’s 

determinations under this rule. 

Evidence of Association Between POW 

Experience and Stroke 

There are very few studies 

investigating the possible relationship 

between POW experience and stroke. In 

September 2000, the VA Advisory 

Committee on Former Prisoners of War 

received the report of an Expert Panel 

on Stroke in Former Prisoners of War, 

which, based on review of the existing 

scientific literature, found only one 

relevant study. That 1996 study 

examined records of 475 former World 

War II POWs and a control group of 81 

non-POW World War II veterans who 

had been followed as part of a long-term 

study by the Medical Follow-up Agency 

of the National Academy of Sciences’

IOM. The study found a seven-fold 

increase in the incidence of stroke 

among the POWs as compared to the 

control group (relative risk = 7.03), and 

a statistically significant nearly ten-fold 

increase in stroke incidence among 

POWs who had suffered extreme 

malnutrition during captivity (relative 

risk = 9.76). (Brass LM, Page WF. Stroke 

in Former Prisoners of War. J Stroke and 

Cerebrovascular Diseases 1996; 6:72–

78.) The study also found that the risk 

of stroke was higher among former 

POWs suffering from post-traumatic 

stress disorder (PTSD) than among 

former POWs without PTSD (relative 

risk = 1.67). The strength of those 

findings is limited by the small size of 

the study population. 

Two more recent studies have also 

addressed the relationship between 

POW experience and stroke. A 2001 

study used Federal death records to 

obtain death data through 1996 for a 

study population of 9,457 former POWs 

and 7,178 controls. The study found 

that former POWs aged 75 years and 

older had an increased risk of stroke 

mortality (hazard ratio = 1.13), although 

the risk was not statistically significant. 

(Page WF, Brass LM. Long-Term Heart 

Disease and Stroke Mortality Among 

Former American Prisoners of War of 

World War II and the Korean Conflict: 

Results of a 50-Year Follow-Up. Military 

Medicine 2001; 166:803–08.) A 

subsample of the overall study 

population had completed a 

questionnaire in 1967 indicating the 

presence or absence of certain 

symptoms during their captivity. The 

study authors found a statistically 

significant increase in death due to 

stroke among veterans who had 

experienced visual symptoms, such as 

night blindness, during their captivity 

(hazard ratio = 3.10). Because the 

presence of visual symptoms during 

captivity may be associated with 

vitamin A deficiency (Page WF. The 

60086 Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 

Health of Former Prisoners of War: 

Results from the Medical Examination 

Survey of Former Prisoners of World 

War II and the Korean Conflict, p. 75. 

Washington DC, National Academies 

Press, 1992.), this finding is consistent 

with the 1996 Brass and Page study in 

suggesting an association between 

malnutrition during POW captivity and 

subsequent stroke. 

On the recommendation of the Expert 

Panel on Strokes in Former Prisoners of 

War, VA’s Environmental Epidemiology 

Service in 2003 conducted a study using 

medical and death data from records of 

VA and the Health Care Financing 

Administration (HCFA) of the 

Department of Health and Human 

Services for the period from 1991 to 

2002. This study, which has not yet 

been published, included 16,641 World 

War II POWs and 1,051 Korean War 

POWs, as well as 8,406 World War II 

controls and 3,816 Korean War controls. 

This study found that POWs had a 

significantly higher incidence of PTSD 

than the controls and that POWs with 

PTSD had a higher incidence of stroke 

than POWs without PTSD (odds ratio = 

1.12 for World War II and 1.25 for 

Korean War). (Kang HK, Bullman TA. 

Ten Year Mortality and Morbidity 

Follow-up of Former World War II and 

Korean War Prisoners of War 

(unpublished VA Study 2003).) 

Although the study did not find a 

significantly increased risk of stroke 

among POWs as compared to nonPOWs, the evidence for an association 

between PTSD and stroke among POWs 

is consistent with findings stated in the 

1996 study by Brass and Page. 

The 1996 Brass and Page study noted 

that several studies have provided 

evidence suggesting an association 

between stress and stroke, although the 

evidence overall is not conclusive. The 

authors also noted that the effects of 

stress on stroke may vary depending 

upon individual reactions to stress. As 

stated in paragraph (e)(2) of § 1.18, the 

Secretary will consider evidence 

concerning the effects of circumstances 

or hardships similar to those 

experienced by POWs, including stress, 

in assessing the evidence for 

establishing presumptions of service 

connection. 

Based on the evidence discussed 

above, the Secretary has determined that 

a presumption of service connection is 

warranted for stroke among former 

prisoners of war. The 1996 and 2001 

POW studies both found an increased 

risk of stroke among former POWs. 

Although there is an absence of other 

directly corroborating studies, the lack 

of additional data is due in part to the 

small size of the POW population 

available for study and the limited 

number of studies generally undertaken 

in this field. Accordingly, the lack of 

corroborating data does not imply the 

absence of an association under these 

circumstances. 

The evidence that the risk of stroke is 

increased among POWs who suffered 

extreme malnutrition or visual 

symptoms during captivity or who have 

been diagnosed with PTSD also lends 

support to the finding of an association 

between POW experience and stroke. As 

indicated in § 1.18, VA considers stress 

and malnutrition to be among the 

hardships ordinarily associated with 

POW experience. Evidence suggesting 

that the risk of stroke increases with the 

severity of those hardships supports the 

conclusion that stroke is associated with 

POW experience. 

Under the standards set forth in 

§ 1.18, the Secretary finds that the 

available evidence is suggestive of an 

association between POW experience 

and stroke because sound scientific 

studies provide evidence of an 

association that is consistent in 

magnitude and direction, even though it 

is limited in some respects by the small 

size of the affected population and the 

correspondingly limited data available 

for study. The Secretary further finds 

that an association between stroke and 

POW experience is biologically 

plausible, as discussed below. 

Accordingly, the Secretary is 

establishing a presumption of service 

connection for stroke in former POWs.

The interim final rule establishing 

this presumption refers generally to 

‘‘stroke and its complications’’ and thus 

will apply to any type of stroke. The 

associations detected in the 1996 and 

2001 POW studies were based on 

diagnoses of all types of stroke, and the 

studies did not state separate findings 

for specific types of stroke. Although 

there are known differences in the three 

major categories of stroke (ischemic, 

hemorrhagic, and embolic) that may 

suggest etiological differences in some 

circumstances, the existing data do not 

provide a basis for excluding any 

category of stroke from the presumption, 

and we believe that any uncertainty 

regarding the strength of the association 

for these closely related diseases should 

be resolved in favor of the former POWs. 

Further, VA believes that the 

requirements of biologic plausibility are 

satisfied for each of the major categories 

of stroke. Presumptions of service 

connection for former POWs can be 

rebutted as provided in 38 U.S.C. 

1113(a) and 38 CFR 3.307(d). 

Accordingly, if evidence in a case 

supports a finding that a particular 

presumptive condition was not actually 

caused by a veteran’s POW experience, 

VA may consider the presumption to be 

rebutted. 

Evidence of Association Between POW 

Experience and Heart Disease 

As with stroke, there are relatively 

few studies addressing the association 

between POW experience and heart 

disease. A series of older studies did not 

find consistent evidence of an 

association, as summarized in Page WF, 

Ostfeld AM. Malnutrition and 

Subsequent Ischemic Heart Disease in 

Former Prisoners of War of World War 

II and the Korean Conflict. (J Clin 

Epidemiol 1994; 47:1437–41.) A 1954 

study found an excess of cardiovascular 

deaths among World War II POWs 

(Cohen BM, Cooper MZ. A Follow-up 

Study of World War II Prisoners of War. 

Veterans Administration Medical 

Monograph, Washington DC: 

Government Printing Office; 1954.), 

although subsequent mortality studies 

in 1970 and 1980 found no excess 

deaths due to cardiovascular diseases 

(Nefzger, MD. Follow-up Studies of 

World War II and Korean War Prisoners. 

I. Study Plan and Mortality Findings. 

Am J Epidemiol 1970; 91:123–38; Keehn 

RJ. Follow-up Studies of World War II 

and Korean War Prisoners III. Mortality 

to January 1, 1976. Am J Epidemiol 

1980; 111:194–211.) A 1975 morbidity 

study found a significantly higher rate 

of hospitalization for heart disease 

among World War II Pacific Theater 

POWs as compared to controls. (Beebe 

GW. Follow-up Studies of World War II 

and Korean War Prisoners: II. Morbidity, 

Disability, and Maladjustments. Am J 

Epidemiol 1975; 101:400–22.) Studies of 

POWs from other countries also yielded 

inconsistent results. 

More recent studies have yielded 

intriguing findings concerning the 

association between heart disease and 

POW experience. The 1994 study by 

Page and Ostfeld found a statistically 

significant increase in deaths due to 

ischemic heart disease among former 

POWs who experienced edema 

(swelling) in their lower limbs during 

captivity (odds ratio = 2.83). Because 

localized edema is a symptom of 

thiamine deficiency, the authors 

theorized that the findings may suggest 

an association between malnutrition 

during captivity and subsequent 

ischemic heart disease. Current VA 

regulations provide for presumptive 

service connection of ischemic heart 

disease in former POWs who 

experienced localized edema during 

captivity. 38 CFR 3.309(c). 

The 2001 study by Page and Brass 

analyzed the increased risk of heart 

disease among former POWs by age 

Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 60087

group and found a trend of increased 

excess risk with advanced age, with a 

statistically significant increased risk for 

former POWs aged 75 years or over 

(hazard ratio = 1.25). The authors stated 

that the findings may indicate that the 

sequelae of serious, acute malnutrition 

may not appear until after many 

decades. 

The 2003 VA study analyzed records 

of inpatient and outpatient treatment 

from VA and HCFA records to 

determine whether POWs had an 

increased incidence of certain diseases 

in comparison to the non-POW controls. 

The study detected small increases in 

the incidence of hypertension and 

myocardial infarction among some, but 

not all of the subpopulations examined, 

and not all of the findings were 

statistically significant. However, the 

study did find a statistically significant 

increased incidence of hypertension and 

chronic heart disease among World War 

II veterans with PTSD (odds ratio = 1.25 

for hypertension and 1.19 for chronic 

heart disease). 

The conclusion that PTSD may be 

associated with cardiovascular disorders 

is also supported by a 1997 study 

finding that Vietnam veterans diagnosed 

with PTSD had a significantly increased 

risk of circulatory disease many years 

after service. (Boscarino JA. Diseases 

Among Men 20 Years After Exposure to 

Severe Stress: Implications for Clinical 

Research and Medical Care. Psychosom 

Med 1997; 59:605–14.) 

Based on the evidence discussed 

above, the Secretary has determined that 

a presumption of service connection is 

warranted for atherosclerotic heart 

disease and hypertensive vascular 

disease among former POWs. The 2001 

study by Page and Brass found a 

statistically significant increased risk of 

mortality due to heart disease in former 

POWs aged 75 and older, based on a 

relatively large population of former 

POWs and controls, many of whom had 

been followed for as many as fifty years 

by the Medical Follow-up Agency of the 

National Academy of Sciences’ IOM. 

The 1994 Page and Ostfeld study also 

found a statistically significant 

increased risk of heart disease in former 

POWs who experienced edema, a 

consequence of malnutrition, and the 

2003 VA study found a statistically 

significant increased risk of heart 

disease among former POWs with PTSD. 

As noted above with respect to stroke, 

the Secretary concludes that the 

evidence suggesting an association 

between heart disease and specific 

hardships of POW experience—

malnutrition and stress—is significant. 

Although the available data concerning 

the health effects of POW experience are 

limited, the link to specific aspects of 

POW experience strengthens the 

evidence for an association between 

heart disease and POW service. 

Accordingly, the Secretary concludes 

that sound scientific studies provide 

limited/suggestive evidence of an 

association between POW experience 

and heart disease. As discussed below, 

the Secretary has also determined that 

the association between POW 

experience and heart disease is 

biologically plausible. Accordingly, the 

Secretary is establishing a presumption 

of service connection for heart disease 

in former POWs.

The studies discussed above did not 

all investigate the same range of heart 

diseases and thus do not clearly resolve 

the question of which types of heart 

disease may be associated with POW 

experience. For purposes of this 

presumption, we will include all 

cardiovascular diseases that are 

consistent, in terms of biologic 

plausibility, with the findings in the 

relevant studies in that the diseases are 

potentially capable of being caused by 

the circumstances or hardships of POW 

service such as extreme stress or 

malnutrition. We describe these 

diseases as atherosclerotic heart disease 

or hypertensive vascular disease (to 

include hypertensive heart disease). 

Atherosclerotic heart disease is a term 

used to refer to a heart disease involving 

progressive narrowing and hardening of 

the arteries over time and encompasses 

ischemic heart disease, coronary artery 

disease, and other diseases that may be 

described by a more specific diagnosis. 

Hypertensive vascular disease refers to 

disease associated with elevated blood 

pressure. The presumption would not 

extend to diseases that arise from viral 

or bacterial causes, because we 

conclude that the relevant studies, and 

the evidence concerning biologic 

plausibility, do not support a finding at 

this time that such heart diseases are 

associated with POW experience. 

With respect to certain types of 

atherosclerotic heart disease or 

hypertensive vascular disease that are to 

be covered by these presumptions, there 

is little available evidence upon which 

to rule in or rule out the possibility that 

the condition is capable of being caused 

by the hardships of POW service. In 

those cases, we have chosen to resolve 

the doubt in favor of veterans and 

include the condition within the scope 

of the presumption. Although the 

necessity of inclusion of some 

conditions may be uncertain from a 

purely scientific perspective, VA has 

decided as a policy matter to resolve 

this issue in favor of veterans because 

there is a reasonable basis for doing so. 

Presumptions of service connection for 

former POWs can be rebutted as 

provided in 38 U.S.C. 1113(a) and 38 

CFR 3.307(d). Accordingly, if evidence 

in a case supports a finding that a 

particular presumptive condition was 

not actually caused by a veteran’s POW 

experience, VA may consider the 

presumption to be rebutted. 

The interim final rule also states that 

the presumption of service connection 

applies to the complications of 

atherosclerotic heart disease and 

hypertensive vascular disease, to make 

clear that congestive heart failure, 

myocardial infarction, arrhythmias, and 

similar complications may be service 

connected if they result from 

atherosclerotic heart disease or 

hypertensive vascular disease. 

Biologic Plausibility 

The Secretary has concluded that an 

association between POW experience 

and both heart disease and stroke is 

biologically plausible. The concept of 

biologic plausibility refers to knowledge 

of the biological mechanism by which a 

particular event can lead to a health 

outcome. It does not require conclusive 

proof of a causal relationship between 

the event and the health outcome, but 

requires a determination as to whether 

there is a possible biological mechanism 

that is consistent with sound scientific 

evidence by which the event could lead 

to the health outcome. Accordingly, to 

be biologically plausible, an association 

must be consistent with existing 

scientific and medical knowledge, even 

if current evidence does not 

conclusively identify a specific known 

mechanism by which the circumstances 

in question cause the diseases 

associated with such circumstances. 

Current medical literature suggests 

plausible, though not established, 

biological mechanisms by which stress 

and/or malnutrition during POW 

captivity could contribute to heart 

disease or stroke. 

A number of authorities have 

postulated that stress may contribute to 

cardiovascular disease through a 

concept referred to as ‘‘allostatic load,’’

which is described as the long-term 

effect of the physiological response to 

stress. Through the process of allostasis, 

the autonomic nervous system, the 

hypothalamic-pituitary-adrenal (HPA) 

axis, and the cardiovascular, metabolic, 

and immune systems protect the body 

by responding to stress with adaptive 

changes. Those adaptations can cause 

wear and tear on the systems involved 

in this response and may produce a 

variety of cardiovascular changes 

associated with atherosclerosis, 

hypertension, cardiac arrhythmias, 

60088 Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 

compromised coronary function, and 

increased risk of myocardial infarction 

and stroke. (McEwen BS. Protective and 

Damaging Effects of Stress Mediators. N 

Engl J Med 1998; 338:171–79; Brunner 

E. Stress Mechanisms in Coronary 

Artery Disease. In: Stansfeld S, Marmot 

M (eds.). Stress and the Heart: 

Psychosocial Pathways to Coronary 

Heart Disease. London. BMJ Books 

2002.) 

Support for the biologic plausibility of 

an association between malnutrition 

and heart disease and stroke comes from 

evidence that vitamin deficiencies may 

cause elevated plasma levels of 

homocysteine, a naturally occurring 

amino acid. A number of studies suggest 

that elevated homocysteine levels may 

produce effects on the cardiovascular 

system that can lead to heart disease or 

stroke. (Stein, JH, McBride PE. 

Hyperhomocysteinemia and 

Atherosclerotic Vascular Disease: 

Pathophysiology, Screening, and 

Treatment. Arch Int Med 1998; 

158:1301–06; Tsai J, Perrella MA, 

Yoshizumi M, Hseih C, Haber E, 

Schlegel R, Lee M. Promotion of 

Vascular Smooth Muscle Cell Growth by 

Homocysteine: A Link to 

Atherosclerosis. 91 Proc Natl Acad Sci 

1994; 91:6369–73.) Although the 

available evidence is not conclusive, it 

satisfies the requirement of biologic 

plausibility for purposes of the 

Secretary’s determination. 

Presumptions of Service Connection 

VA’s regulation at 38 CFR 3.309(c) 

identifies the diseases VA presumes to 

be service connected for former POWs. 

We are amending this list of diseases by 

adding atherosclerotic heart disease, 

hypertensive vascular disease 

(including hypertensive heart disease), 

stroke, and their complications. 

We are removing the note in current 

§ 3.309(c) specifying that the term 

‘‘beriberi heart disease’’ includes 

ischemic heart disease in a former POW 

who experienced localized edema 

during captivity. This note was added 

based on the 1994 Page and Ostfeld 

study finding an association between 

the presence of lower-limb edema 

during POW captivity and subsequent 

ischemic heart disease. This interim 

final rule establishes a presumption of 

service connection for heart disease, 

including ischemic heart disease, 

without regard to whether localized 

edema was present in service. 

Accordingly, we are removing the 

current note to make clear that the 

presence of edema is no longer required 

in order to establish service connection 

for ischemic heart disease. 

Other Changes to § 3.309(c) 

We are making one other change to 

§ 3.309(c). Section 3.309(c) states that 

the presumptions of service connection 

apply only to veterans who were 

interned or detained for not less than 30 

days. The 30-day requirement was 

formerly mandated by the governing 

statutory provisions at 38 U.S.C. 

1112(b). Effective December 16, 2003, 

however, section 201 of the Veterans 

Benefits Act of 2003, Pub. L. No. 108–

183, 117 Stat. 2651, amended 38 U.S.C. 

1112(b) to eliminate the 30-day 

requirement for psychosis, any anxiety 

states, dysthymic disorders, organic 

residuals of frostbite and post-traumatic 

osteoarthritis. We are revising § 3.309(c) 

to conform to the current provisions of 

section 1112(b). We are including heart 

disease and stroke among the conditions 

that will be presumed to be service 

connected following any period of POW 

captivity. The diseases that remain 

subject to a 30-day detention or 

internment requirement generally are 

those that would be expected to be 

incurred only over a prolonged period 

of detention or internment, such as 

diseases associated with malnutrition. 

Because the evidence indicates that 

heart disease and stroke potentially may 

be associated either with malnutrition 

during prolonged captivity or with 

stress due to circumstances such as 

torture or abuse, which may occur 

during even brief periods of captivity, 

we do not believe a minimum period of 

detention or internment is warranted for 

these presumptions.

As part of a VA project to rewrite all 

of its adjudication regulations in part 3 

of title 38, Code of Federal Regulations, 

we published a notice of proposed rule 

making in the Federal Register of July 

27, 2004 (69 FR 44614), proposing a 

new regulation that would implement 

the provisions of section 201 of the 

Veterans Benefits Act of 2003 removing 

the 30-day detention or internment 

requirement for certain POW diseases. 

Because we are now issuing this interim 

final rule to amend the list of diseases 

in § 3.309(c) effective immediately, we 

believe it is desirable to make these 

additional changes at this time to bring 

the regulation into conformity with the 

current statute. 

Administrative Procedure Act 

VA has determined that it is 

appropriate to issue this rule as an 

interim final rule without providing an 

opportunity for prior public comment. 

The provisions of this rule to be 

codified at 38 CFR 1.18 specify the 

procedures VA intends to follow in 

exercising its discretionary authority 

under 38 U.S.C. 501(a) to establish new 

presumptions of service connection for 

former POWs. These portions of the rule 

constitute a general statement of VA 

policy or, alternatively, rules of VA 

procedure and practice. Accordingly, 

they are exempt under 5 U.S.C. 

553(b)(3)(A) from the notice and 

comment requirements of the 

Administrative Procedure Act. The 

portions of this rule revising 38 CFR 

3.309(c) to conform to the provisions of 

38 U.S.C. 1112(b), as amended by the 

Veterans Benefits Act of 2003, do not 

involve any change in law, but merely 

restate the statutory provisions of 38 

U.S.C. 1112(b). Accordingly, these 

portions of the rule are, at most, 

interpretative rules that are also exempt 

under 5 U.S.C. 553(b)(3)(A) from the 

notice and comment requirements of the 

Administrative Procedure Act. 

Alternatively, pursuant to 5 U.S.C. 

553(b)(3)(B), the Secretary for good 

cause finds that notice and an 

opportunity for prior public comment is 

unnecessary with respect to this portion 

of the rule because it merely tracks a 

statutory provision that VA is required 

to follow. 

In accordance with 5 U.S.C. 

553(b)(3)(B), the Secretary finds that 

there is good cause for dispensing with 

the opportunity for prior comment with 

respect to the portions of this rule 

establishing new presumptions of 

service connection for atherosclerotic 

heart disease, hypertensive vascular 

disease, and stroke among former 

POWs. The Secretary concludes that 

providing an opportunity for prior 

comment is unnecessary because this 

portion of the rule is unlikely to 

generate any adverse public comment, 

inasmuch as it confers a benefit on a 

deserving class of veterans based on 

sound scientific evidence. The Secretary 

further finds that it is impracticable to 

delay this regulation for the purpose of 

soliciting prior public comment because 

the class of veterans affected by this rule 

is elderly and rapidly dwindling. More 

than 90% of all POWs served in World 

War II and are now, on average, over 

eighty years old. As of January 1, 2003, 

this population of World War II veterans 

had an annual mortality rate of nine 

percent. Delay in implementing these 

rules would have a significant adverse 

effect and frustrate the beneficial 

purpose of this rule in view of the high 

mortality rate among the POW 

population and the fact that the majority 

of former POWs are at an age where 

their medical and financial needs are 

likely to be at their greatest. 

For the foregoing reasons, the 

Secretary is issuing this rule as an 

interim final rule. The Secretary will 

Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 60089

consider and address comments that are 

received within 30 days of the date this 

interim final rule is published in the 

Federal Register. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

requires, at 2 U.S.C. 1532, that agencies 

prepare an assessment of anticipated 

costs and benefits before developing any 

rule that may result in an expenditure 

by State, local, or tribal governments, in 

the aggregate, or by the private sector, of 

$100 million or more in any given year. 

This rule will have no such effect on 

State, local, or tribal governments, or the 

private sector. 

Executive Order 12866 

The Office of Management and Budget 

has reviewed this document under 

Executive Order 12866. 

Paperwork Reduction Act 

This document contains no provisions 

constituting a collection of information 

under the Paperwork Reduction Act (44 

U.S.C. 3501–3521). 

Regulatory Flexibility Act 

The Secretary hereby certifies that 

this regulatory amendment will not 

have a significant economic impact on 

a substantial number of small entities as 

they are defined in the Regulatory 

Flexibility Act (RFA), 5 U.S.C. 601–612. 

The reason for this certification is that 

these amendments will not directly 

affect any small entities. Only VA 

beneficiaries and their survivors will be 

directly affected. Therefore, pursuant to 

5 U.S.C. 605(b), these amendments are 

exempt from the initial and final 

regulatory flexibility analysis 

requirements of sections 603 and 604. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance program numbers are 64.109, 

and 64.110.

List of Subjects 

38 CFR Part 1 

Administrative practice and 

procedure, Claims. 

38 CFR Part 3 

Administrative practice and 

procedure, Claims, Disability benefits, 

Health care, Veterans, Vietnam.

Approved: September 8, 2004. 

Anthony J. Principi, 

Secretary of Veterans Affairs.

■ For the reasons set forth in the 

preamble, the Department of Veterans 

Affairs amends 38 CFR parts 1 and 3 as 

follows:

PART 1—GENERAL PROVISIONS

■ 1. The authority citation for part 1 

continues to read as follows:

Authority: 38 U.S.C. 501(a), unless 

otherwise noted.

■ 2. Section 1.18 is added to read as 

follows:

§ 1.18 Guidelines for establishing 

presumptions of service connection for 

former prisoners of war. 

(a) Purpose. The Secretary of Veterans 

Affairs will establish presumptions of 

service connection for former prisoners 

of war when necessary to prevent 

denials of benefits in significant 

numbers of meritorious claims. 

(b) Standard. The Secretary may 

establish a presumption of service 

connection for a disease when the 

Secretary finds that there is at least 

limited/suggestive evidence that an 

increased risk of such disease is 

associated with service involving 

detention or internment as a prisoner of 

war and an association between such 

detention or internment and the disease 

is biologically plausible. 

(1) Definition. The phrase ‘‘limited/

suggestive evidence’’ refers to evidence 

of a sound scientific or medical nature 

that is reasonably suggestive of an 

association between prisoner-of-war 

experience and the disease, even though 

the evidence may be limited because 

matters such as chance, bias, and 

confounding could not be ruled out 

with confidence or because the 

relatively small size of the affected 

population restricts the data available 

for study. 

(2) Examples. ‘‘Limited/suggestive 

evidence’’ may be found where one 

high-quality study detects a statistically 

significant association between the 

prisoner-of-war experience and disease, 

even though other studies may be 

inconclusive. It also may be satisfied 

where several smaller studies detect an 

association that is consistent in 

magnitude and direction. These 

examples are not exhaustive. 

(c) Duration of detention or 

internment. In establishing a 

presumption of service connection 

under paragraph (b) of this section, the 

Secretary may, based on sound 

scientific or medical evidence, specify a 

minimum duration of detention or 

internment necessary for application of 

the presumption. 

(d) Association. The requirement in 

paragraph (b) of this section that an 

increased risk of disease be ‘‘associated’’

with prisoner-of-war service may be 

satisfied by evidence that demonstrates 

either a statistical association or a causal 

association. 

(e) Evidence. In making 

determinations under paragraph (b) of 

this section, the Secretary will consider, 

to the extent feasible: 

(1) Evidence regarding the increased 

incidence of disease in former prisoners 

of war; 

(2) Evidence regarding the health 

effects of circumstances or hardships 

similar to those experienced by 

prisoners of war (such as malnutrition, 

torture, physical abuse, or psychological 

stress); 

(3) Evidence regarding the duration of 

exposure to circumstances or hardships 

experienced by prisoners of war that is 

associated with particular health effects; 

and 

(4) Any other sound scientific or 

medical evidence the Secretary 

considers relevant. 

(f) Evaluation of studies. In evaluating 

any study for the purposes of this 

section, the Secretary will consider: 

(1) The degree to which the study’s 

findings are statistically significant; 

(2) The degree to which any 

conclusions drawn from the study data 

have withstood peer review; 

(3) Whether the methodology used to 

obtain the data can be replicated; 

(4) The degree to which the data may 

be affected by chance, bias, or 

confounding factors; and 

(5) The degree to which the data may 

be relevant to the experience of 

prisoners of war in view of similarities 

or differences in the circumstances of 

the study population. 

(g) Contracts for Scientific Review and 

Analysis. To assist in making 

determinations under this section, the 

Secretary may contract with an 

appropriate expert body to review and 

summarize the scientific evidence, and 

assess the strength thereof, concerning 

the association between detention or 

internment as a prisoner of war and the 

occurrence of any disease, or for any 

other purpose relevant to the Secretary’s 

determinations.

Authority: 38 U.S.C. 501(a), 1110.

PART 3—ADJUDICATION

Subpart A—Pension, Compensation, 

and Dependency and Indemnity 

Compensation

■ 3. The authority citation for part 3, 

subpart A continues to read as follows:

Authority: 38 U.S.C. 501(a), unless 

otherwise noted.

■ 4. Section 3.309 (c) is amended by 

removing the ‘‘Note’’ immediately 

following the list of diseases and by 

revising the paragraph and its authority 

citation to read as follows:

60090 Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / Rules and Regulations 

§ 3.309 Disease subject to presumptive 

service connection.

* * * * *

(c) Diseases specific as to former 

prisoners of war. (1) If a veteran is a 

former prisoner of war, the following 

diseases shall be service connected if 

manifest to a degree of disability of 10 

percent or more at any time after 

discharge or release from active 

military, naval, or air service even 

though there is no record of such 

disease during service, provided the 

rebuttable presumption provisions of 

§ 3.307 are also satisfied. 

Psychosis. 

Any of the anxiety states. 

Dysthymic disorder (or depressive 

neurosis). 

Organic residuals of frostbite, if it is 

determined that the veteran was 

interned in climatic conditions 

consistent with the occurrence of 

frostbite. 

Post-traumatic osteoarthritis. 

Atherosclerotic heart disease or 

hypertensive vascular disease 

(including hypertensive heart disease) 

and their complications (including 

myocardial infarction, congestive heart 

failure, arrhythmia). 

Stroke and its complications. 

(2) If the veteran: 

(i) Is a former prisoner of war and; 

(ii) Was interned or detained for not 

less than 30 days, the following diseases 

shall be service connected if manifest to 

a degree of 10 percent or more at any 

time after discharge or release from 

active military, naval, or air service even 

though there is no record of such 

disease during service, provided the 

rebuttable presumption provisions of 

§ 3.307 are also satisfied. 

Avitaminosis. 

Beriberi (including beriberi heart 

disease). 

Chronic dysentery. 

Helminthiasis. 

Malnutrition (including optic atrophy 

associated with malnutrition). 

Pellagra. 

Any other nutritional deficiency. 

Irritable bowel syndrome. 

Peptic ulcer disease. 

Peripheral neuropathy except where 

directly related to infectious causes. 

Cirrhosis of the liver.

Authority: 38 U.S.C. 1112(b).

* * * * *

[FR Doc. 04–22543 Filed 10–6–04; 8:45 am] 

BILLING CODE 8320–01–P

POSTAL SERVICE

39 CFR Part 501

Authorization to Manufacture and 

Distribute Postage Meters

AGENCY: Postal Service.

ACTION: Final rule.

SUMMARY: This final rule amends the 

regulations that define a postage meter 

and its components and a manufacturer 

and/or distributor of postage meters. 

The rule also puts forth the 

responsibilities of any authorized 

person or entity to notify the Postal 

Service upon a change in ownership or 

control, or bankruptcy or insolvency, 

and identifies factors the Postal Service 

will consider in acting upon requests for 

changes of approval, ownership, or 

control of an approved manufacturer or 

distributor.

DATES: This rule is effective on October 

7, 2004.

FOR FURTHER INFORMATION CONTACT:

Wayne Wilkerson, manager of Postage 

Technology Management, by fax at 703–

292–4050.

SUPPLEMENTARY INFORMATION: A 

proposed rule was published in the 

Federal Register on May 10, 2004, pages 

25864–25865, with comments due on or 

before July 9, 2004. Written comments 

were received from the vendor 

community. 

The Postal Service gave thorough 

consideration to these comments, and 

incorporated as appropriate with only 

minor, non-material exception. You may 

review comments received by 

submitting a request of the office of 

Postage Technology Management at 

703–292–3691 or by fax at 703–292–

4073. 

The final plan follows.

List of Subjects in 39 CFR Part 501

Administrative practice and 

procedure, Postal Service.

The Amendment

■ For the reasons set out in this 

document, the Postal Service is 

amending 39 CFR Part 501 as follows:

PART 501—AUTHORIZATION TO 

MANUFACTURE AND DISTRIBUTE 

POSTAGE METERS

■ 1. The authority citation for Part 501 

continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 

401, 403, 404, 410, 2601, 2605; Inspector 

General Act of 1978, as amended (Pub. L. 

95’452, as amended), 5 U.S.C. App. 3.

■ 2. Revise § 501.1 to read as follows:

§ 501.1 Postage evidencing system/

infrastructure authorization. 

(a) Postage evidencing systems 

produce evidence of prepayment of U.S. 

postage by any method other than 

postage stamps or permit imprint. They 

include but are not limited to postage 

meters and PC Postage’’ systems. The 

Postal Service considers the 

infrastructure associated with such 

systems to be essential to the exercise of 

its specific powers to prescribe postage 

and provide evidence of payment of 

postage under 39 U.S.C. 404(a)(2) and 

(4). 

(b) Due to the potential for adverse 

impact upon Postal Service revenue, the 

following activities may not be engaged 

in by any person or concern without 

prior, written approval of the Postal 

Service: 

(1) Producing or distributing any 

postage evidencing system that 

generates U.S. postage. 

(2) Repairing, distributing, 

refurbishing, remanufacturing, or 

destroying any component of a postage 

evidencing system that accounts for or 

authorizes the printing of U.S. postage. 

(3) Owning or operating an 

infrastructure that maintains operating 

data for the production of U.S. postage, 

or accounts for U.S. postage purchased 

for distribution through a postage 

evidencing system. 

(4) Owning or operating an 

infrastructure that maintains operating 

data that is used to facilitate licensing 

or registration with the Postal Service of 

users of a postage evidencing system. 

(c) Any person or entity seeking 

authorization to perform any activity 

described in paragraph (b) of this 

section must submit a request to the 

Postal Service in person or in writing. 

(d) Approval shall be based upon 

satisfactory evidence of the applicant’s 

integrity and financial responsibility, 

and commitment to the security of the 

postage evidencing system, and a 

determination that disclosure to the 

applicant of the Postal Service 

customer, financial, or other data of a 

commercial nature necessary to perform 

the function for which approval is 

sought would be appropriate and 

consistent with good business practices 

within the meaning of 39 U.S.C. 410 

(c)(2). The Postal Service may condition 

its approval on the agreement to 

undertakings by the applicant that 

would give the Postal Service 

appropriate assurance of the applicant’s 

ability to meet its obligations under this 

section, including but not limited to the 

method and manner of performing 

certain financial, security, and servicing 

functions and the need to maintain 

sufficient financial reserves to guarantee