Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 48601 

(2) For operations conducted under a 14 

CFR part 119 operating certificate or under 

14 CFR part 91, subpart K, we suggest that 

you notify your principal inspector, or 

lacking a principal inspector, the manager of 

the local flight standards district office or 

certificate holding district office, before 

operating any aircraft complying with this 

AD through an AMOC. 

(g) Additional Information 

(1) Eurocopter Emergency Alert Service 

Bulletin No. ASB BO105–10–124, Revision 1, 

dated October 18, 2010, and No. ASB– 

BO105LS–10–12, Revision 1, dated October 

20, 2010, which are not incorporated by 

reference, contain additional information 

about the subject of this AD. For service 

information identified in this AD, contact 

American Eurocopter Corporation, 2701 N. 

Forum Drive, Grand Prairie, TX 75052; 

telephone (972) 641–0000 or (800) 232–0323; 

fax (972) 641–3775; or at http:// 

www.eurocopter.com/techpub. You may 

review a copy of the service information at 

the FAA, Office of the Regional Counsel, 

Southwest Region, 2601 Meacham Blvd., 

Room 663, Fort Worth, Texas 76137. 

(2) The subject of this AD is addressed in 

European Aviation Safety Agency (EASA) 

Emergency AD No. 2010–0216–E, dated 

October 21, 2010 (corrected October 29, 

2010). You may view the EASA AD on the 

Internet at http://www.regulations.gov in 

Docket No. FAA–2011–1285. 

(h) Subject 

Joint Aircraft Service Component (JASC) 

Code: 6210, Main Rotor Blades. 

Issued in Fort Worth, Texas, on July 31, 

2013. 

Lance T. Gant, 

Acting Directorate Manager, Rotorcraft 

Directorate, Aircraft Certification Service. 

[FR Doc. 2013–19158 Filed 8–8–13; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 764 and 766 

[Docket No. 120207107–3621–02] 

RIN 0694–AF59 

Time Limit for Completion of Voluntary 

Self-Disclosures and Revised Notice of 

the Institution of Administrative 

Enforcement Proceedings 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: This rule requires that the 

final, comprehensive narrative account 

required in voluntary self-disclosures 

(VSDs) of violations of the Export 

Administration Regulations (EAR) be 

received by the Office of Export 

Enforcement (OEE) within 180 days of 

OEE’s receipt of the initial VSD 

notification. This rule also authorizes 

the use of delivery services other than 

registered or certified mail for providing 

notice of the issuance of a charging 

letter instituting an administrative 

enforcement proceeding under the EAR. 

It also removes the phrase ‘‘if delivery 

is refused’’ from a provision related to 

determining the date that notice of a 

charging letter’s issuance is served 

based on an attempted delivery to the 

respondent’s last known address. The 

Bureau of Industry and Security is 

making these changes to be better able 

to resolve administrative enforcement 

proceedings in a timely manner and 

provide more efficient notice of 

administrative charging letters. 

DATES: This rule is effective September 

9, 2013. 

FOR FURTHER INFORMATION CONTACT: 

Special Agent Richard Jereski, 

Investigations Division, Office of Export 

Enforcement, Bureau of Industry and 

Security, US Department of Commerce, 

Room H4514, 14th Street and 

Pennsylvania Avenue NW., Washington, 

DC 20230. Tel: (202) 482–5036. 

Facsimile: (202) 482–5889. 

SUPPLEMENTARY INFORMATION: 

Background 

The Bureau of Industry and Security 

(BIS), Office of Export Enforcement 

(OEE), investigates possible violations of 

the Export Administration Regulations 

(EAR) and orders, licenses, and 

authorizations issued thereunder. These 

investigations may result in allegations 

of violations that may be settled, 

adjudicated in an administrative 

enforcement proceeding, or referred to 

the Department of Justice for possible 

criminal prosecution. On November 7, 

2012, BIS published a proposed rule (77 

FR 66777) that set forth three changes to 

the EAR, which are being implemented 

with some revisions here. One change 

addresses voluntary self-disclosures in 

connection with OEE’s conduct of 

investigations. The other two changes 

address service of notice in 

administrative enforcement 

proceedings. This rule also makes nonsubstantive changes to the layout of the 

regulations to improve readability. 

Deadline for Completing the Narrative 

Account Portion of a Voluntary SelfDisclosure 

Section 764.5 of the EAR provides a 

procedure whereby parties that believe 

they may have committed a violation of 

the EAR can voluntarily disclose the 

facts of potential violations to OEE. 

Such disclosures that meet the 

requirements of § 764.5 typically are 

afforded ‘‘great weight’’ by BIS relative 

to other mitigating factors in 

determining what administrative 

sanctions, if any, to seek. Section 764.5 

of the EAR requires an initial 

notification, which is to include a 

description of the general nature and 

extent of the suspected violations and is 

to be made as soon as possible after the 

violations are discovered, and is 

followed by a thorough review and the 

completion and submission of a 

narrative account of the suspected 

violations, including providing all 

relevant documentation. If the person 

making the initial notification 

subsequently completes and submits the 

narrative account, the disclosure is 

deemed to have been submitted to OEE 

on the date of the initial notification. 

The date of the initial notification may 

be significant because information 

provided to OEE may be considered a 

voluntary disclosure only if the 

information ‘‘is received by OEE for 

review prior to the time that OEE or 

another United States Government 

agency has learned of the same or 

substantially similar information from 

another source and has commenced an 

investigation or inquiry in connection 

with that information.’’ (15 CFR 

764.5(b)(3)). This rule adds a 

requirement that the completed 

narrative account be received by BIS 

within 180 days of BIS’s receipt of the 

initial notification for initial 

notifications received on or after the 

effective date of this rule. 

The Director of OEE may extend this 

180-day time deadline at his or her 

discretion if US Government interests 

would be served by an extension or 

upon a showing by the party making the 

disclosure that more time is reasonably 

necessary to complete the narrative 

account. In response to public 

comments discussed below, this final 

rule includes some greater detail about 

what a request to extend the 180-day 

deadline should contain. Such requests 

should show specifically that the person 

making the request: (1) Began its review 

promptly after discovery of the 

violations; (2) has been conducting its 

review and preparation of the narrative 

account as expeditiously as can be 

expected, consistent with the need for 

completeness and accuracy; (3) 

reasonably needs the requested 

extension despite having acted 

consistently with (1) and (2); and (4) has 

considered whether interim compliance 

or other corrective measures may be 

needed and has undertaken such 

measures as appropriate to prevent 

recurring or additional violations. Such 

requests also should set out a proposed 


pmangrum on DSK3VPTVN1PROD with RULES
48602 Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 

timeline for completion and submission 

of the narrative account that is 

reasonable under the applicable facts 

and circumstances. They should also 

designate a contact person, and provide 

that contact person’s current business 

street address, email address, and 

telephone number, for purposes of 

communicating with OEE regarding the 

extension request. (A similar 

requirement to designate a contact 

person is included in this rule regarding 

initial notifications). Extension requests 

may also include additional information 

that the requestor reasonably believes is 

pertinent to the request under the 

applicable facts and circumstances. 

Some illustrative examples of 

circumstances that could, depending on 

the overall facts and circumstances, 

support a request that additional time is 

reasonably necessary include the 

following: 

• Records or information from 

multiple entities and/or jurisdictions are 

needed to complete the narrative 

account. 

• Material changes occur in the 

business, such as a bankruptcy, large 

layoffs, or a corporate acquisition or 

restructuring, and present difficulties in 

gaining access to, or analyzing, 

information needed to complete the 

narrative account. 

• A pending US Government 

determination (such as a commodity 

jurisdiction determination or a 

classification request) is needed to 

complete the narrative account. 

The Director of OEE may place 

conditions on his or her approval of an 

extension. OEE may obtain an 

agreement to toll the statute of 

limitations at the time that an initial 

notification is filed. However, if a 

tolling agreement that applies to any 

violations disclosed in the initial 

notification or discovered during the 

review conducted to prepare the 

narrative account has not already been 

obtained at the time of a request for an 

extension, the Director of OEE may 

require one as a condition of approving 

the extension. The Director of OEE also 

has discretion to require the disclosing 

person to undertake specific interim 

remedial compliance measures as a 

condition of granting an extension to the 

180-day deadline. 

Failure to meet either the 180-day 

deadline or an extended deadline 

granted by the Director of OEE would 

not be an additional violation of the 

EAR. However, that failure may reduce 

or eliminate the mitigating impact of the 

voluntary disclosure. The 180-day 

deadline serves as an incentive to the 

disclosing party, as meeting the 

deadline will allow information 

contained in the narrative account to be 

credited by OEE as having been 

disclosed on the date of the initial 

notification even if the information was 

not explicitly described in that initial 

notification. This new rule is designed 

to be consistent with the existing 

requirement in § 764.5(c)(1) that an 

initial notification be made as soon as 

possible after violations are discovered. 

Section 764.5 also will continue to 

acknowledge that a disclosing party may 

not be able to identify all of the possible 

violations of the EAR at the time an 

initial notification was made, consistent 

with § 764.5(c)(3), and to recommend 

that the review following the initial 

notification should cover a period of 

five years prior to the date of the initial 

notification 

Imposing a deadline to complete 

voluntary disclosures is consistent with 

the practices of other agencies. The 

International Traffic in Arms 

Regulations administered by the 

Department of State impose a 60-day 

deadline (22 CFR 127.12(c)). Similarly, 

the Department of the Treasury’s Office 

of Foreign Assets Control also imposes 

time constraints by requiring that 

disclosures be made within a reasonable 

time following the initial notification. 

Based on its experience with voluntary 

self-disclosures, BIS believes that 180 

days is ample time to complete the 

narrative account in most instances and 

that requests for extensions will 

normally not be necessary or justified. 

Institution of Administrative 

Enforcement Proceedings 

Section 766.3 of the EAR sets forth the 

procedures for instituting administrative 

enforcement proceedings. Those 

procedures include issuing a charging 

letter, which constitutes the formal 

administrative complaint. The charging 

letter sets forth the essential facts about 

the alleged violations and certain other 

information about the case, and informs 

the respondent that failure to answer the 

charges will be treated as a default. 

Respondents must be notified of the 

issuance of a charging letter by one of 

the methods listed in § 766.3(b) of EAR. 

One allowable method is mailing a copy 

of the letter by registered or certified 

mail to the respondent’s last known 

address. This rule adds, as an 

authorized method of notification, 

sending a copy of the charging letter to 

the respondent’s last known address by 

express mail or by a commercial courier 

or delivery service. The purpose of this 

change is to facilitate the process of 

notifying the respondent in cases where 

the respondent’s last known address is 

in a country with a postal service that 

is inefficient or unreliable or in which 

postal delivery tracking information is 

not available. It also will allow BIS to 

select an efficient and effective method 

of notifying the respondent of the 

issuance of the charging letter. 

Moreover, unlike registered and 

certified mail, reputable commercial 

courier or delivery services and the US 

Postal Service’s express mail use pointby-point tracking or similar electronic 

tracking methods to provide detailed 

records of a parcel’s delivery or 

attempted delivery. The use of services 

that provide detailed tracking 

information for parcels sent outside the 

United States will enable BIS to track 

and monitor the delivery status of 

pending notifications more efficiently 

and effectively. 

Respondents are required to answer a 

charging letter within 30 days of being 

served with notice of its issuance. Prior 

to the effective date of this rule, the date 

of service of notice is determined under 

Section 766.3(c) by the date of delivery, 

or of attempted delivery if delivery is 

refused. This rule removes the phrase 

‘‘if delivery is refused’’ from § 766.3(c) 

of the EAR, eliminating the requirement 

that an attempted delivery must involve 

documentation that the delivery was 

‘‘refused.’’ The phrase ‘‘is refused’’ 

focuses on registered and certified mail, 

which include a postcard-sized hardcopy receipt that is returned to the 

sender after delivery or attempted 

delivery. This rule provides for the use 

of reliable mail or delivery services that 

do not use such a hard-copy return 

receipt system and can efficiently and 

effectively track deliveries and 

attempted deliveries. In addition, BIS 

has found that in some instances foreign 

postal services do not return the receipt 

even though the parcel or package has 

been not been returned, including in 

situations where the respondent 

subsequently contacts BIS about the 

charging letter. Moreover, some foreign 

postal services do not list ‘‘refused’’ as 

an option on a pre-printed return receipt 

or do not record other information when 

the package containing the charging 

letter is returned, including in situations 

when the package has been returned 

unopened. This change to § 766.3(c) 

would better enable BIS to determine 

the date of service of notice of issuance 

of charging letters sent to entities 

located in foreign countries. 

Comments on the Proposed Rule 

BIS received comments from one 

individual and four organizations. Most 

of the ideas expressed in the comments 

related to the 180-day limit for 

completing the narrative account. The 

comments generally supported the 180- 

day limit. However, one commenter 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 48603 

proposed a shorter time limit with 

possible extensions. Other commenters 

expressed concerns that in some cases 

180 days would be inadequate. 

Comment: Two commenters 

expressed approval of the 180-day limit 

as providing adequate time to complete 

the review and compile the narrative 

account in most cases. Both commenters 

noted the possibility that extensions 

could be granted in limited 

circumstances. One commenter 

recommended that the initial limit be 

set at 60 days, with the possibility of 

successive 30-day extensions and that 

the acceptable reasons for an extension 

narrow as the time since the initial 

disclosure approaches 180 days. While 

acknowledging that many VSDs likely 

could not be completed within 60 days, 

this commenter stated that under its 

proposed procedure disclosing parties 

would better focus on timely 

completion of voluntary self-disclosures 

without having to request more than one 

extension. That commenter also asserted 

that a 60-day deadline would align BIS’s 

practice with those of the Directorate of 

Defense Trade Controls. 

Response: This final rule does not 

change the basic time limit of 180 days. 

BIS’s intent in setting the 180-day limit 

is to provide a basic time limit that is 

sufficient to complete the narrative 

disclosure in the large majority of 

voluntary self-disclosures. BIS believes 

that a party who has begun a voluntary 

self-disclosure process should be 

mindful of the requirements of § 764.5, 

including the deadline imposed by the 

regulation, and should be capable of 

organizing and managing its activities 

with the goal of meeting the deadline. 

Similarly, in situations where more than 

180 days’ time is reasonably necessary 

to complete the task, the disclosing 

party should be able to explain the 

reasons why that is the case and provide 

a reasonable estimate of the additional 

time needed. BIS further believes that 

procedures proposed above likely 

would lead to repeated requests for 

extensions (and related agency 

determinations and responses) that 

should be unnecessary and would 

themselves increase the total workload 

for all involved in the voluntary selfdisclosure process. 

In addition, BIS does not believe that 

its deadline needs to be ‘‘aligned’’ in the 

sense of being identical to those of other 

government agencies. The proposed rule 

did note that the 180-day deadline is 

consistent with the practices of other 

agencies and regulations, including in 

the Department of State’s International 

Traffic in Arms Regulations and the 

Department of the Treasury’s Office of 

Foreign Assets Control regulations. 

These examples were intended to 

demonstrate that by proposing a 

deadline for completion of voluntary 

self-disclosures, BIS is acting in the 

same general manner as other agencies 

that have a role in export controls. BIS 

believes prescribing a time limit that is 

reasonable with respect to EAR 

violations is more important than 

having identical time limits with other 

programs. 

Comment: Several commenters 

expressed concern that although the 

180-day deadline should generally be 

sufficient, there may be instances where 

the time limit would be inadequate. One 

commenter stated that large 

organizations with operations in 

multiple countries may need to obtain 

records from and interview employees 

at multiple locations in order to 

complete an investigation and prepare a 

thorough final narrative. One 

commenter noted that the proposed rule 

authorized the Director of OEE to act at 

his or her discretion, which the 

commenter characterized as 

authorization to act with ‘‘unfettered 

discretion.’’ The commenter also stated 

its belief that the rule would not afford 

a disclosing party a regulatory right to 

an extension of time even if 

circumstances warranted an extension. 

Finally, the commenter described as 

‘‘not comforting,’’ BIS’s statement in the 

preamble to the proposed rule that 

requests for extensions would, in most 

instances, not be necessary or justified. 

Commenters recommended several 

changes, which are described below. 

One such recommendation was to 

state in the rule the circumstances that 

would justify an extension. Another 

recommendation was to state in the rule 

that extensions would not be 

unreasonably refused when more time is 

shown to be reasonably necessary to 

complete the account. A third 

recommendation was to allow 

disclosing parties to submit, within 180 

days of the initial disclosure, either a 

completed narrative account or a 

supplemental filing that indicates the 

status of the company’s review, 

including interim remedial measures it 

has already taken and an action plan 

with the company’s timeline for 

completion of the review and 

submission of the final narrative 

account. 

Response: BIS does not believe that it 

is possible to identify in advance all of 

the circumstances that would make it in 

the government’s interest to grant an 

extension or those that would make an 

extension reasonably necessary to 

complete the narrative account. The 

facts and circumstances of each matter 

vary depending on, inter alia, the items, 

destinations and parties involved, the 

nature and extent of the violations, and 

the size, scope, and structure of 

disclosing parties and their export 

activities and compliance programs. 

Therefore, case-by-case requests by 

disclosing parties and decisions by an 

authorized official are necessary. This 

final rule sets out in greater detail the 

types of information that should be 

included in a request, and as with the 

preamble to the proposed rule, the 

preamble to this final rule provides 

illustrative examples of the type of 

circumstances that could provide 

support for a request that additional 

time is reasonably necessary. These 

examples are not an exclusive list, and 

extension requests and the 

consideration of those requests will, of 

necessity, be made on a case-by-case 

basis, but the examples provide 

guidance about the type of situations 

that, depending on the overall facts and 

circumstances, may justify an extension 

beyond 180 days. BIS believes that in 

most instances 180 days should be 

adequate to complete the narrative 

account. However, as discussed above, 

in appropriate instances the Director of 

OEE may grant an extension to a person 

seeking an extension of time. In most 

circumstances, tolling agreements will 

be signed and agreed upon prior to the 

extension being provided. 

Comment: Some commenters 

expressed a desire for more precision 

concerning the procedures for 

submitting a voluntary self-disclosure. 

Specifically, they asked that the rule 

state precisely when the 180-day time 

period begins to run and when during 

the 180-day period a request for 

extension may be submitted. These 

commenters also asked for more 

information about the timing of a 

request for an extension. They asked 

whether a request for an extension may 

be submitted with the initial disclosure, 

whether a request may be submitted 

after the 180 days has elapsed, and what 

would happen if a disclosing party 

submitted a request before the 180 days 

had elapsed, but too late for BIS to make 

a decision and respond within 180 days. 

Response: BIS agrees with the 

comments summarized in the 

immediately preceding paragraph that it 

would be more helpful to provide more 

information about the procedures 

surrounding the 180-day deadline and 

for requesting an extension than was 

provided in the proposed rule. In 

response to those comments, this final 

rule provides that guidance. This final 

rule states that, for purposes of 

calculating the 180-day deadline, the 

date of initial notification is the date 

that the initial notification is received 


pmangrum on DSK3VPTVN1PROD with RULES
48604 Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 

by OEE. BIS will notify the disclosing 

party in writing of the date that the 

initial notification was received. To 

enable such notification, BIS has added 

a new requirement that parties should 

designate a contact person in their 

initial notification and provide that 

person’s contact information. For the 

narrative account to be considered 

timely under paragraph (c)(2)(iii) of 

§ 764.5, the disclosing party must 

submit the completed narrative account 

in time for BIS to receive it within 180 

days of BIS’ receipt of the initial 

notification or, where appropriate, seek 

and receive an extension from BIS. As 

this rule indicates, however, initial 

notifications should be sent so that they 

are received by OEE as soon as possible 

and narrative accounts should be 

complete, accurate, and timely 

submitted. 

This final rule also states that to be 

considered, a request for an extension of 

time to submit the narrative account 

must be received by OEE before the 

deadline for receipt of the narrative 

account. The Director of OEE will 

evaluate all of the facts and 

circumstances surrounding a request 

and any related investigation(s) in 

deciding whether to grant an extension. 

Requests for an extension should be 

made as soon as possible once a 

disclosing person determines that it will 

be unable to meet the deadline or the 

extended deadline where an extension 

previously has been granted, and 

possesses the information needed to 

prepare an extension request in 

accordance with paragraph (c)(2)(iv)(B). 

Parties who request an extension shortly 

before the deadline incur the risk that 

the Director of OEE will be unable to 

properly consider and determine the 

request and communicate his or her 

decision before the deadline. That said, 

BIS believes that disclosing parties 

typically will need some time after the 

initial notification to acquire the facts 

that may justify an extension and 

prepare the extension request, including 

proposing a reasonable extended 

timeline for the completion and 

submission of the narrative account. BIS 

expects it will be rare for parties to 

request an extension of time in their 

initial disclosure, because it is unlikely 

that disclosing parties will have at the 

time of the initial notification all 

information pertinent to an extension 

request or the ability to show that an 

extension is needed despite prompt and 

diligent efforts to complete their review 

and prepare a narrative account. 

The Director of OEE also is unlikely 

to grant extension requests that appear 

be ‘‘boilerplate’’ requests not based on 

the particular facts and circumstances, 

or to grant repeated requests or requests 

that appear to be submitted on a routine, 

‘‘it can’t hurt to ask’’ basis. As discussed 

in the preamble, this final rule provides 

additional detail concerning the 

contents of an extension request, which 

should limit the number of routine or 

boilerplate requests. 

Comment: One commenter 

recommended that BIS impose a 

reasonableness standard as to both 

tolling agreements and remedial 

measures that may be required when 

granting an extension. The commenter 

asserted that tolling agreements 

extending back more than five years 

prior to the initial disclosure have 

sometimes been required. 

Response: BIS understands that there 

may be times when meeting the 180-day 

deadline will not be possible (see 

discussion above); however, as also 

discussed, BIS must be able to 

appropriately remedy matters brought to 

light in a disclosure and will require (in 

most cases) the signing of a tolling 

agreement to extend the statutory limit. 

BIS will continue its practice of seeking 

appropriate tolling agreements and 

remedial measures that take into 

account the specific facts and 

circumstances of each case in requiring 

a tolling agreement and any remedial 

measures. 

Comment: One commenter 

recommended that BIS specify what 

constitutes a completed narrative 

account. The commenter suggested that 

an explicit definition of a completed 

VSD would ensure consistency and 

uniformity and lead to a more efficient 

and transparent process for all parties. 

BIS could then request additional 

information or documentation as 

needed. The commenter proposed that 

the elements set forth in § 764.5(c)(3), 

(4) and (5) should satisfy the 

requirements of a voluntary selfdisclosure. This commenter also 

recommended that a disclosing party 

who ‘‘prepares a VSD in good faith that 

reasonably addresses all applicable 

elements in § 764.5(c)(3), (4) and (5), 

. . . should be granted the presumption 

of acceptance as ‘complete’ when 

received by OEE.’’ 

Response: BIS agrees with this 

comment to the extent that it may be 

helpful to the disclosing party to know 

when and how they can meet the 180- 

day deadline. To be considered a 

complete submission for purposes of 

meeting the 180-day deadline (or the 

extended deadline if one is granted by 

BIS), the voluntary disclosure must 

meet all of the relevant requirements of 

Section 764.5 of the EAR, including 

paragraphs (c)(3), (c)(4), and (c)(5). In 

response to public comments on the 

proposed rule, paragraph (c)(2)(iii) of 

§ 764.5 in this final rule so provides. In 

addition, as discussed in the preamble, 

paragraph (c)(2)(iv) provides greater 

detail concerning the contents of an 

extension request. Under paragraph 

(c)(2)(iv), a person making an extension 

request may also submit additional 

information it reasonably believes is 

pertinent under the applicable facts and 

circumstances. As currently with regard 

to initial notifications and narrative 

accounts submitted to BIS, OEE may 

seek supplemental information from a 

person making an extension request 

after its receipt and review of the 

request. 

Comment: BIS received several 

comments concerning informing the 

disclosing party about the status of the 

investigation. One recommendation was 

that BIS ‘‘communicate the status of the 

investigation of the voluntary selfdisclosure, akin to the status updates in 

SNAP–R’’ (the system for electronically 

submitting export license applications 

and certain other documents to BIS and 

monitoring their status). Another 

recommendation was that BIS be 

required to acknowledge receipt of a 

completed disclosure within some 

reasonable time after its receipt. One 

commenter acknowledged that it is 

perhaps impractical to require BIS to 

complete all action on a voluntary selfdisclosure within a specified time 

period, possibly 180 days, but stated 

that it is practical to expect that BIS will 

dispose of a voluntary self-disclosure as 

promptly as possible given the 

circumstances of the disclosure. This 

commenter recommended that OEE be 

required to send the disclosing party a 

status report within 180 days of the 

receipt of the completed VSD and every 

90 days thereafter. 

Response: BIS works to resolve 

voluntary self-disclosures promptly. 

However, voluntary self-disclosures 

vary in number, size, and complexity. In 

addition, other investigations and 

activities can affect the amount of 

resources that BIS can devote to 

resolving voluntary self-disclosures. 

Therefore, BIS cannot set a time limit 

for completion of investigations made in 

response to voluntary self-disclosures. 

Comment: Two commenters 

expressed approval of allowing service 

of charging documents by private 

courier. One noted that doing so would 

be a modernization of BIS procedures. 

Response: BIS concurs. 

Non-substantive Changes to Layout To 

Improve Readability 

In addition to the changes proposed 

in the proposed rule and those made in 


pmangrum on DSK3VPTVN1PROD with RULES
Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 48605 

response to the public comments, this 

final rule reorganizes § 764.5(c)(2) by 

breaking it into multiple designated 

paragraphs, each addressing separate 

topics, with italicized headers to 

improve readability. 

Rulemaking Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). This rule is consistent with the 

goals of Executive Order 13563. This 

rule has been determined not to be a 

significant rule for purposes of 

Executive Order 12866. 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the Paperwork 

Reduction Act of 1995 (PRA), 44 U.S.C. 

3501, et seq., unless that collection of 

information displays a currently valid 

Office of Management and Budget 

(OMB) control number. This rule 

involves an approved information 

collection entitled ‘‘Procedure for 

Voluntary Self-Disclosure of Violations’’ 

(OMB control number 0694–0058). BIS 

believes that the changes to the 

voluntary disclosure procedures that 

this rule describes would have no 

material effect on the burden imposed 

by this collection. Send comments 

regarding this burden estimate or any 

other aspect of this collection of 

information, including suggestions for 

reducing the burden to Jasmeet Seehra, 

Office of Management and Budget 

(OMB), by email 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 2099B, 14th Street and 

Pennsylvania Ave. NW., Washington, 

DC 20230 or by email to 

publiccomments@bis.doc.gov 

referencing RIN 0694–AF59 in the 

subject line. 

3. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, 5 U.S.C. 601 et 

seq., generally requires an agency to 

prepare a regulatory flexibility analysis 

of any rule subject to the notice and 

comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute. 

Under section 605(b) of the RFA, 

however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulations, Department of 

Commerce, submitted a memorandum 

to the Chief Counsel for Advocacy, 

Small Business Administration, 

certifying that this rule will not have a 

significant impact on a substantial 

number of small entities. This final rule 

adds a new requirement that parties that 

decide to submit an initial notification 

should include their name and contact 

information with the notification. This 

request for contact information was not 

in the proposed rule. However, because 

the requirement to include contact 

information in any voluntarily 

submitted initial notification will not 

have a significant additional impact on 

a substantial number of small entities or 

increase the economic burden more 

than a nominal amount, no changes 

were necessary to the rationale for the 

certification in the proposed rule (77 FR 

66777, 66778, November 7, 2012). BIS 

received no comments on that rationale 

and it is not being changed for this final 

rule. Therefore it is not repeated here. 

On August 21, 2001, the Export 

Administration Act of 1979, as 

amended, expired and the President, 

through Executive Order 13222 of 

August 17, 2001 (3 CFR, 2001 Comp. 

783 (2002)), as amended by Executive 

Order 13637 of March 8, 2013, 78 FR 

16129 (March 13, 2013), and as 

extended most recently by the Notice of 

August 15, 2012, 77 FR 49699 (August 

16, 2012), has continued the EAR in 

effect under the International 

Emergency Economic Powers Act (50 

U.S.C. 1701 et seq.). BIS continues to 

carry out the provisions of the Export 

Administration Act, as appropriate and 

to the extent permitted by law, pursuant 

to Executive Order 13222. 

List of Subjects 

15 CFR Part 764 

Administrative practice and 

procedure, Exports, Law enforcement, 

Penalties. 

15 CFR Part 766 

Administrative practice and 

procedure, Confidential business 

information, Exports, Law enforcement, 

Penalties. 

For the reasons stated in the 

preamble, parts 764 and 766 of the 

Export Administration Regulations 

(15 CFR parts 730–774) are amended as 

follows. 

PART 764—[AMENDED] 

■ 1. The authority citation for part 764 

continues to read as follows: 

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

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 2. Revise § 764.5(c)(2) to read as 

follows: 

§ 764.5 Voluntary self-disclosure. 

* * * * * 

(c) * * * 

(2) Initial notification. (i) Manner and 

content of initial notification. The initial 

notification should be in writing and be 

sent to the address in paragraph (c)(7) of 

this section. The notification should 

include the name of the person making 

the disclosure and a brief description of 

the suspected violations, and should 

designate a contact person regarding the 

initial notification and provide that 

contact person’s current business street 

address, email address, and telephone 

number. The notification should 

describe the general nature and extent of 

the violations. OEE recognizes that there 

may be situations where it will not be 

practical to make an initial notification 

in writing. For example, written 

notification may not be practical if a 

shipment leaves the United States 

without the required license, yet there is 

still an opportunity to prevent 

acquisition of the items by unauthorized 

persons. In such situations, OEE should 

be contacted promptly at the office 

listed in paragraph (c)(7) of this section. 

(ii) Initial notification date. For 

purposes of calculating when a 

complete narrative account must be 

submitted under paragraph (c)(2)(iii) of 

this section, the initial notification date 

is the date the notification is received by 

OEE. OEE will notify the disclosing 

party in writing of the date that it 

receives the initial notification. At 

OEE’s discretion, such writing from OEE 

may be on paper, or in an email message 

or facsimile transmission from OEE, or 

by any other method for the 

transmission of written 

communications. Where it is not 

practical to make an initial notification 

in writing, the person making the 

notification should confirm the oral 

notification in writing as soon as 

possible. 

(iii) Timely completion of narrative 

accounts. The narrative account 

required by paragraph (c)(3) of this 

section must be received by OEE within 

180 days of the initial notification date 

for purposes of paragraph (b)(3) of this 

section, absent an extension from the 

Director of OEE. If the person making 


pmangrum on DSK3VPTVN1PROD with RULES
48606 Federal Register / Vol. 78, No. 154 / Friday, August 9, 2013 / Rules and Regulations 

the initial notification subsequently 

completes and submits to OEE the 

narrative account required by paragraph 

(c)(3) of this section such that OEE 

receives it within 180 days of the initial 

notification date, or within the 

additional time, if any, granted by the 

Director of OEE pursuant to paragraph 

(c)(2)(iv) of this section, the disclosure, 

including violations disclosed in the 

narrative account that were not 

expressly mentioned in the initial 

notification, will be deemed to have 

been made on the initial notification 

date for purposes of paragraph (b)(3) of 

this section if the initial notification was 

made in compliance with paragraphs 

(c)(1) and (2) of this section. Failure to 

meet the deadline (either the initial 180- 

day deadline or an extended deadline 

granted by the Director of OEE) would 

not be an additional violation of the 

EAR, but such failure may reduce or 

eliminate the mitigating impact of the 

voluntary disclosure under Supplement 

No. 1 to this part. For purposes of 

determining whether the deadline has 

been met under this paragraph, a 

complete narrative account must 

contain all of the pertinent information 

called for in paragraphs (c)(3), (c)(4), 

and (c)(5) of this section, and the 

voluntary self-disclosure must 

otherwise meet the requirements of this 

section. 

(iv) Deadline extensions. The Director 

of OEE may extend the 180-day 

deadline upon a determination in his or 

her discretion that U.S. Government 

interests would be served by an 

extension or that the person making the 

initial notification has shown that more 

than 180 days is reasonably needed to 

complete the narrative account. 

(A) Conditions for extension. The 

Director of OEE in his or her discretion 

may place conditions on the approval of 

an extension. For example, the Director 

of OEE may require that the disclosing 

person agree to toll the statute of 

limitations with respect to violations 

disclosed in the initial notification or 

discovered during the review for or 

preparation of the narrative account, 

and/or require the disclosing person to 

undertake specified interim remedial 

compliance measures. 

(B) Contents of Request. (1) In most 

instances 180 days should be adequate 

to complete the narrative account. 

Requests to extend the 180-day deadline 

set forth in paragraph (c)(2)(iii) of this 

section will be determined by the 

Director of OEE pursuant to his or her 

authority under this paragraph (c)(2)(iv) 

based upon his consideration and 

evaluation of U.S. Government interests 

and the facts and circumstances 

surrounding the request and any related 

investigations. Such requests should 

show specifically that the person 

making the request: 

(i) Began its review promptly after 

discovery of the violations; 

(ii) Has been conducting its review 

and preparation of the narrative account 

as expeditiously as can be expected, 

consistent with the need for 

completeness and accuracy; 

(iii) Reasonably needs the requested 

extension despite having begun its 

review promptly after discovery of the 

violations and having conducted its 

review and preparation of the narrative 

account as expeditiously as can be 

expected consistent with the need for 

completeness and accuracy; and 

(iv) Has considered whether interim 

compliance or other corrective measures 

may be needed and has undertaken such 

measures as appropriate to prevent 

recurring or additional violations. 

(2) Such requests also should set out 

a proposed timeline for completion and 

submission of the narrative account that 

is reasonable under the applicable facts 

and circumstances, and should also 

designate a contact person regarding the 

request and provide that contact 

person’s current business street address, 

email address, and telephone number. 

Requests may also include additional 

information that the person making the 

request reasonably believes is pertinent 

to the request under the applicable facts 

and circumstances. 

(C) Timing of requests. Requests for an 

extension should be made before the 

180-day deadline and as soon as 

possible once a disclosing person 

determines that it will be unable to meet 

the deadline or the extended deadline 

where an extension previously has been 

granted, and possesses the information 

needed to prepare an extension request 

in accordance with paragraph 

(c)(2)(iv)(B) of this section. Requests for 

extension that are not received before 

the deadline for completing the 

narrative account has passed will not be 

considered. Parties who request an 

extension shortly before the deadline 

incur the risk that the Director of OEE 

will be unable to consider the request, 

determine whether or not to grant the 

extension, and communicate his or her 

decision before the deadline, and that 

any subsequently submitted narrative 

account will be considered untimely 

under paragraph (c)(2)(iii) of this 

section. 

* * * * * 

PART 766—[AMENDED] 

■ 3. The authority citation paragraph for 

part 766 continues to read as follows: 

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

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 4. Section 766.3 is amended by 

revising paragraphs (b)(1) and (c) to read 

as follows: 

§ 766.3 Institution of administrative 

enforcement proceedings. 

* * * * * 

(b) * * * 

(1) By sending a copy by registered or 

certified mail or by express mail or 

commercial courier or delivery service 

addressed to the respondent at the 

respondent’s last known address; 

* * * 

(c) The date of service of notice of the 

issuance of a charging letter instituting 

an administrative enforcement 

proceeding, or service of notice of the 

issuance of a supplement or amendment 

to a charging letter, is the date of its 

delivery, or of its attempted delivery, by 

any means described in paragraph (b)(1) 

of this section. 

Dated August 5, 2013. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2013–19364 Filed 8–8–13; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9622] 

RIN 1545–BI96 

Guidance Regarding Deferred 

Discharge of Indebtedness Income of 

Corporations and Deferred Original 

Issue Discount Deductions; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correcting amendments. 

SUMMARY: This document contains 

corrections to final regulations and 

removal of temporary regulations (TD 

9622) that were published in the 

Federal Register on Wednesday, July 3, 

2013 (78 FR 39984). The final 

regulations provide necessary guidance 

regarding the accelerated inclusion of 

deferred discharge of indebtedness (also 

known as cancellation of debt (COD)) 

income (deferred COD income) and the 

accelerated deduction of deferred 

original issue discount (OID) (deferred 

OID deductions) under section 

108(i)(5)(D) (acceleration rules), and the 

calculation of earnings and profits as a 


pmangrum on DSK3VPTVN1PROD with RULES