71376 Federal Register / Vol. 75, No. 225 / Tuesday, November 23, 2010 / Proposed Rules 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 748 

[Docket No. 100826397–0346–02] 

RIN 0694–AE98 

Simplified Network Application 

Processing System, On-Line 

Registration and Account Maintenance 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Proposed rule. 

SUMMARY: The Bureau of Industry and 

Security (BIS) is proposing to 

implement an on-line registration 

process for obtaining an account to 

submit license applications and similar 

documents electronically. The current 

registration process requires paper and 

facsimile submissions. This proposed 

rule sets forth the information that 

parties registering on-line would be 

required to provide to BIS and sets forth 

the duties that registered parties would 

have with respect to keeping 

information in their accounts current. 

DATES: Comments must be received by 

BIS no later than January 24, 2011. 

ADDRESSES: Comments may be 

submitted via to any of the following. 

• The Federal e-rulemaking portal, 

regulations.gov. The regulations.gov 

docket number for this rule is: BIS– 

2010–0037. 

• Via e-mail at 

publiccomments@bis.doc.gov—refer to 

RIN 0694–AE98 in the subject line. 

• Mail or delivery to Regulatory 

Policy Division, Room 2705, Bureau of 

Industry and Security, U.S. Department 

of Commerce, Washington, DC 20230— 

refer to RIN 0694–AE98 in the comment. 

FOR FURTHER INFORMATION CONTACT: 

Thomas W. Andrukonis, Director, 

Export Management and Compliance 

Division, Office of Exporter Services, 

telephone 202.482.6393, e-mail 

tandruko@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

BIS administers an export licensing 

program pursuant to the Export 

Administration Regulations. In 

connection with this program, BIS 

requires most parties to submit license 

applications, classification requests, 

encryption registrations, License 

Exception AGR notifications and foreign 

national review requests in connection 

with the License Exceptions APP and 

CIV (herein ‘‘work items’’) electronically 

via BIS’s Simplified Network 

Application Processing (SNAP–R) 

system. Currently, parties must register 

to use that system via a paper- or 

facsimile-based process. BIS plans to 

replace that registration process with 

one that is exclusively on-line. 

Organizations or individuals who 

submit work items would be referred to 

as ‘‘filing entities.’’ Individuals who act 

on behalf of filing entities would be 

known as ‘‘individual users.’’ For each 

filing entity, at least one individual user 

would act as an ‘‘account administrator.’’ 

An account administrator would be able 

to submit work items on behalf of his or 

her filing entity and would have 

additional responsibilities within the 

on-line registration system. 

An account administrator would have 

the ability to add and remove individual 

users to or from the account of his or her 

filing entity. The account administrator 

would also be able to designate other 

individual users who are authorized to 

act on behalf of the same filing entity as 

account administrators or to terminate 

an individual user’s account 

administrator status. The account 

administrator would be able to 

deactivate the account of an individual 

user and reactivate the account of a 

previously deactivated individual user. 

The account administrator would be 

able to update the filing entity’s 

identifying information such as name 

and address and any individual user’s 

identifying information such as name 

and telephone number. The account 

administrator would also be able to reset 

an individual user’s password. 

BIS anticipates that once this system 

is in place, the current processes in 

which BIS employees create on-line 

accounts for filing entities and add or 

remove new individual users to or from 

a filing entity’s account in response to 

written or facsimile communications 

would cease. Account administrators for 

filing entities would handle routine 

changes to the filing entities’ accounts 

and BIS personnel would become 

involved only if necessary to protect a 

government interest such as preventing 

misuse of the SNAP–R system or if 

necessary to assist someone attempting 

to register on-line or administer an 

account. 

BIS intends to begin operating the online registration system on the date of 

publication of the final rule, but 

proposes to phase in mandatory use of 

on-line registration and account 

management according to the following 

schedule. 

New Filing Entities 

On the effective date of the final rule 

and for 30 days thereafter, an individual 

registering a filing entity that does not 

currently have a SNAP–R account 

would be able to use either the existing 

paper- and facsimile-based process or 

the new on-line registration process 

described in the following paragraph. 

Beginning 31 days after the effective 

date of the final rule, the on-line 

registration process would be 

mandatory for all new registrants. 

Requirement To Designate an Account 

Administrator at the Time of Electronic 

Registration 

A person registering on-line for a 

filing entity that does not have a SNAP– 

R account, will be required to enter all 

of the identifying information for the 

filing entity including a certification 

that the person is authorized to register 

the filing entity and to act as account 

administrator for the filing entity as well 

as his or her own identifying 

information. That person will become 

the initial account administrator for that 

filing entity. 

Deadlines for Designating an Account 

Administrator If the Filing Entity Was 

Not Registered Electronically 

Filing entities that are registered to 

use SNAP–R on the effective date of the 

final rule and filing entities that elect to 

use the paper and facsimile based 

process during the first 30 days 

following the effective date of the final 

rule would be required to designate an 

account administrator as described 

below. 

On the effective date of the final rule 

and for 90 days thereafter, any 

individual user who is authorized to 

submit work items on behalf of a filing 

entity would be able to continue to 

access SNAP–R, submit new work items 

and perform any necessary tasks in 

connection with pending work items. In 

addition, the first such individual user 

who designates himself or herself as the 

account administrator would be 

required to certify that he or she is 

authorized to act as account 

administrator and would become the 

initial account administrator. BIS would 

inform via e-mail all other individual 

users who are authorized to act for that 

filing entity of the identity of the newly 

designated account administrator. 

During the period beginning 91 days 

after the effective date of the final rule 

and ending 180 days after the effective 

date of the final rule, no individual user 

from a filing entity that does not have 

at least one account administrator 

would be able to access the SNAP–R 

system for any purpose other than to 

designate himself or herself as account 

administrator for that filing entity and 

certify that he or she is authorized to act 

as account administrator. As soon as 


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one individual user is designated as the 

account administrator, that individual 

user as well as all of the other 

individual users from that filing entity 

will regain full SNAP–R access. 

Beginning 181 days after the effective 

date of the final rule, all filing entity 

accounts for which no account 

administrator has been designated 

would become inactive. To use the 

account for any purpose, an individual 

would have to log on to the SNAP–R 

Web site and furnish all of the 

information that would be required to 

register a new filing entity. 

Rulemaking Requirements 

1. This rule has been determined to be 

not significant for purposes of E.O. 

12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor is subject to a penalty 

for failure to comply with, a collection 

of information, subject to the 

requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

Office of Management and Budget 

(OMB) Control Number. This regulation 

contains a collection previously 

approved by OMB under control 

number 0694–0096. BIS believes that 

this rule will not materially affect the 

burden imposed by that collection. Send 

comments regarding these burden 

estimates or any other aspect of these 

collections of information, including 

suggestions for reducing the burden, to 

Jasmeet Seehra, Office of Management 

and Budget (OMB), by e-mail to 

jseehra@omb.eop.gov, or by fax to (202) 

395–7285; and to the Regulatory Policy 

Division, Bureau of Industry and 

Security, Department of Commerce, 

Room 2705, 14th Street, and 

Pennsylvania Ave., NW., Washington, 

DC 20230. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Chief Counsel for Regulation of 

the Department of Commerce has 

certified to the Chief Counsel for 

Advocacy of the Small Business 

Administration that this proposed rule, 

if adopted in final form, would not have 

a significant economic impact on a 

substantial number of small entities. 

Economic Impact 

BIS believes that this rule will reduce 

the burden on small entities. This rule 

will eliminate the current and archaic 

practice of using a paper and facsimile 

based process for obtaining 

authorization to submit work items 

electronically. It will also reduce the 

time between initial submission of 

registration information and receipt of 

authorization to use the electronic filing 

system. Finally, the system will allow 

registered filing entities to add or 

remove individual users without 

waiting for approval from BIS. 

BIS implemented a revised version of 

its Simplified Network Applications 

Processing System (SNAP–R) in October 

2006. The SNAP–R system provides a 

Web based mechanism for parties to 

submit license applications, 

classification requests, encryption 

registrations, License Exception AGR 

notifications and foreign national 

review requests in connection with 

License Exceptions APP and CIV 

electronically and for BIS to respond 

electronically to each matter. In October 

2008, BIS made use of the SNAP–R 

system mandatory except in five 

specified circumstances. SNAP–R is the 

vehicle through which BIS receives 

most of the submissions for which 

SNAP–R is available. In calendar year 

2009, BIS received 27,245 submissions 

via SNAP–R and 55 submissions via 

paper. On-line processing provides 

advantages to the government and to the 

parties submitting work items through 

reduced processing times. 

Despite these advantages, BIS still 

requires parties registering to use the 

SNAP–R on-line system and those who 

need to make changes to their accounts 

to use paper or facsimile transmissions 

to do so. A party wishing to register now 

obtains a description of the identifying 

information that the party must submit 

and the text of a certification that the 

party must make from the BIS Web site. 

The party copies the information onto 

its letterhead and sends or faxes the 

paper document to BIS. BIS personnel 

then assign a company identification 

number to the filing entity and a 

personal identification number to each 

individual user identified on the 

submission and communicate those 

numbers to the appropriate 

representative of the filing entity and to 

each individual user. A separate letter 

must be sent or faxed to BIS each time 

a new individual user needs to be 

authorized to file on behalf of the filing 

entity and BIS personnel issue a new 

personal identification number to that 

person via telephone or e-mail. Finally, 

a letter must be sent to BIS when an 

individual user no longer is authorized 

to submit work items on behalf of the 

filing entity. BIS personnel then 

deactivate that individual user’s 

account. 

Under the procedure envisioned by 

this proposed rule, a potential 

individual user, representing a filing 

entity would access a Web page where 

he or she would enter the necessary 

identifying information about himself or 

herself and about the filing entity which 

that person represents. That individual 

would also certify on-line that he or she 

is authorized to register the filing entity 

and to act as account administrator for 

the filing entity. That individual would 

receive both the company identification 

number and his or her personal 

identification number via e-mail. Upon 

receipt of those numbers, that 

individual user could submit work 

items on behalf of the filing entity. He 

or she could also register new 

individual users for the filing entity. 

Once registered, each such new 

individual user could log on and begin 

submitting work items. 

The process will be entirely Web 

based and will not require users to 

purchase hardware or software. Parties 

who do not have access to the Internet 

would not be affected by this rule 

because they are exempt from the 

requirement to submit work items 

electronically and thus would not need 

to register to use SNAP–R. 

Number of Small Entities 

BIS does not collect information about 

the size of the entities that submit 

license applications, classification 

requests, and related submissions via 

the SNAP–R system. In 2007, BIS made 

an attempt to estimate the number of 

small entities that would be affected by 

the rule requiring electronic 

submissions by the following method. 

BIS determined that 1,592 entities 

sent in two or more submissions in 2006 

(entities that make no more than one 

submission per year are exempt from 

the electronic filing requirement). By 

reviewing public information BIS 

determined that 252 of these entities 

could not possibly be small entities 

because they had more than $100 

million in annual sales, had more than 

5,000 employees or because they were 

United States government agencies. BIS 

did not have a basis for determining 

whether the remaining 1340 entities 

were small entities. 

Because many industries may be 

involved in exporting, BIS could not 

directly relate its data to the ‘‘Small 

Business Size Standards Matched to 

North American Industry Classification 

System’’ (the Standards Table) 

published by the Small Business 

Administration (SBA). However, BIS 

notes that the November 5, 2010, 

Standards Table designates business as 

small based on either sales or number of 

employees, depending on the industry. 

The maximum annual sales and 

maximum number of employees listed 

in that document are $35.5 million and 


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1,500, respectively. Both numbers are 

far below the threshold selected by BIS 

for screening entries as to size. A few 

entries in the Standards Table are based 

on having no more than million in 

assets, but these entries are financial 

institutions that are unlikely to be 

exporting the kinds of items that require 

a specific authorization from BIS. 

Moreover, most of the categories in 

the Standards Table for which the sales 

limit is relatively high are unlikely to be 

affected by this rule because they are 

unlikely to engage in export or reexport 

transactions that require specific 

authorization from BIS. Examples of 

small entities at the higher end of the 

sales range of the Standards Table 

include: Family Clothing Stores, Food 

Service Contractors and Home Centers— 

$35.5 million each, Forest Fire 

Suppression—$17.5 million, New 

Single-Family Housing Construction 

Contractors—$33.5 million and 

Gasoline Stations with Convenience 

Stores—$27.0 million. 

Conclusion 

Based on the information that it does 

know, BIS believes that most categories 

of small entities identified by the Small 

Business Administration are unlikely to 

be engaged in the kinds of transactions 

that require specific authorization from 

BIS and thus would be unlikely to use 

BIS’s SNAP–R system. The exemption 

from the electronic filing requirement 

that BIS’s rules provide for parties 

making no more than one submission 

per year and parties that lack access to 

the Internet tend to further exclude 

small entities from the impact of this 

rule. 

Significantly, the effect of this rule on 

all affected entities is likely to be a 

reduction in burden because this rule 

allows implementation of an electronic 

registration procedure for an existing 

electronic document filing system. In 

doing so, it replaces an existing paper 

based registration system, allowing 

parties who need to submit documents 

to BIS to register to do so in less time. 

Existing provisions of the Export 

Administration Regulations require 

most parties to submit work items 

electronically. This rule would not 

change that requirement nor would it 

change any exceptions to that 

requirement. Parties who qualify and 

who wish to submit work items on 

paper would not be subject to the 

registration requirement of this rule. 

However, those who either are required 

or choose to submit their work items 

electronically would no longer be 

subjected to a paper based registration 

process before they can begin electronic 

submissions. In addition, once 

registered with an account 

administration in place, filing entities 

would no longer have to submit 

information to BIS via paper or 

facsimile and wait for a response from 

BIS in order to add or remove 

individual users or to update identifying 

information. 

List of Subjects in 15 CFR Part 748 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

Accordingly, the Export 

Administration Regulations (15 CFR 

Parts 730–774) are proposed to be 

amended as follows: 

1. The authority citation for part 748 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 12, 2010, 75 FR 50681 (August 16, 

2010). 

2. Section 748.7 is revised to read as 

follows: 

§ 748.7 Registering for electronic 

submission of license applications and 

related documents. 

(a) Scope. This section describes the 

procedures for registering to submit 

electronic documents to BIS. The 

procedures in this section apply to 

submission of export and reexport 

license applications (other than Special 

Comprehensive Licenses and Special 

Iraq Reconstruction Licenses), 

classification requests, encryption 

registrations, License Exception AGR 

notifications and foreign national 

review requests under License 

Exceptions APP or CIV. 

(b) Registration and Use of BIS’s 

Simplified Network Applications 

System—Redesign (SNAP–R). Parties 

wishing to submit electronically must 

log on to [URL to be determined] to 

register. Upon initial registration, the 

party (the filing entity) will have to 

supply the name of the entity that will 

be submitting documents electronically 

and its address and the name, telephone 

number, facsimile number and e-mail 

address of the person who will act as 

account administrator. The person will 

be required to certify that the 

information so supplied is correct and 

complete, that the person has authority 

to register the entity that will be making 

electronic submissions and that the 

person has authority to act as an 

account administrator for that entity. 

(c) Role of account administrator. The 

account administrator is able to add and 

remove individual users to and from the 

account of the filing entity for which it 

is the account administrator. The 

account administrator can also make 

individual users account administrators 

and can terminate an individual user’s 

administrator status. The account 

administrator can deactivate the account 

of an individual user and reactivate the 

account of a previously deactivated 

individual user. The account 

administrator can update the filing 

entity’s identifying information such as 

name and address and any individual 

user’s identifying information such as 

name, telephone number, facsimile 

number and e-mail address. The 

account administrator can reset 

individual users’ passwords. 

(d) Role of individual users. An 

individual user may submit to BIS 

export and reexport license applications 

(other than Special Comprehensive 

Licenses and Special Iraq 

Reconstruction Licenses), classification 

requests, encryption registrations, 

License Exception AGR notifications 

and foreign national review requests 

under License Exceptions APP or CIV. 

(e) Effect of submission to BIS. BIS 

may refuse to accept an electronic 

submission if it has reason to believe 

that the individual user making the 

submission lacks authority to do so. 

However, BIS is not obligated to 

conduct any checks to determine 

whether an individual user has the 

necessary authority and will generally 

treat users as acting within their 

authority. Acting through their account 

administrators, parties have the ability 

to remove an individual user when that 

individual user is no longer authorized 

to make submissions on behalf of that 

party to BIS and should do so promptly. 

(f) Requirement to keep identifying 

information accurate and current—(1) 

Filing entities. Filing entities must, 

through their account administrators, 

update their identifying information 

such as name, address and telephone 

number in their SNAP–R account as 

necessary to keep that information 

accurate and current. 

(2) Individual users. Individual users 

must, through their account 

administrators, update their identifying 

information such as name, telephone 

number, facsimile number and e-mail 

address in their SNAP–R accounts as 

necessary to keep that information 

accurate and current. 

Dated: November 15, 2010. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2010–29482 Filed 11–22–10; 8:45 am] 

BILLING CODE 3510–33–P 


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