Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules 22689 

of the local flight standards district office/ 

certificate holding district office. 

(3) An AMOC that provides an acceptable 

level of safety may be used for any repair 

required by this AD if it is approved by the 

Boeing Commercial Airplanes Organization 

Designation Authorization (ODA) that has 

been authorized by the Manager, Seattle 

ACO, to make those findings. For a repair 

method to be approved, the repair must meet 

the certification basis of the airplane, and the 

approval must specifically refer to this AD. 

(k) Related Information 

(1) For more information about this AD, 

contact Wayne Lockett, Aerospace Engineer, 

Airframe Branch, ANM–120S, FAA, Seattle 

Aircraft Certification Office (ACO), 1601 Lind 

Avenue SW., Renton, Washington 98057– 

3356; phone: 425–917–6447; fax: 425–917– 

6590; email: wayne.lockett@faa.gov. 

(2) For service information identified in 

this AD, contact Boeing Commercial 

Airplanes, Attention: Data & Services 

Management, P.O. Box 3707, MC 2H–65, 

Seattle, Washington 98124–2207; telephone 

206–544–5000, extension 1; fax 206–766– 

5680; email me.boecom@boeing.com; Internet 

https://www.myboeingfleet.com. You may 

also review the referenced service 

information in the docket at 

www.regulations.gov (refer to Docket No. 

FAA–2012–0336). You may review copies of 

the referenced service information at the 

FAA, Transport Airplane Directorate, 1601 

Lind Avenue SW., Renton, Washington 

98057–3356. For information on the 

availability of this material at the FAA, call 

425–227–1221. 

Issued in Renton, Washington, on April 5, 

2012. 

Ali Bahrami, 

Manager, Transport Airplane Directorate, 

Aircraft Certification Service. 

[FR Doc. 2012–9177 Filed 4–16–12; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 748 

[Docket No. 110331231–1608–02] 

RIN 0694–AF19 

Revisions to Authorization Validated 

End-User Provisions: Requirement for 

Notice of Export, Reexport, or Transfer 

(In-Country) and Clarification 

Regarding Termination of Conditions 

on VEU Authorizations 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Proposed rule. 

SUMMARY: In this rule, the Bureau of 

Industry and Security (BIS) proposes to 

amend the Export Administration 

Regulations (EAR) by adding a 

requirement for persons shipping under 

Authorization Validated End-User 

(VEU) to send written notice of such 

shipments to the recipient VEU. BIS 

further proposes to amend the EAR to 

clarify that when items subject to itemspecific conditions under Authorization 

VEU no longer require a license for 

export or reexport or become eligible for 

shipment under a license exception, as 

set forth in the EAR, VEUs are no longer 

bound by the conditions associated with 

such items. 

DATES: Comments must be received by 

no later than June 18, 2012. 

ADDRESSES: Comments on this rule may 

be submitted to the Federal rulemaking 

portal (http://www.regulations.gov). The 

regulations.gov ID for this rule is: BIS– 

2012–0005. Comments may also be 

submitted via email to 

publiccomments@bis.doc.gov or on 

paper to Regulatory Policy Division, 

Bureau of Industry and Security, Room 

2099B, U.S. Department of Commerce, 

14th St. and Pennsylvania Ave. NW., 

Washington, DC 20230. Please refer to 

RIN 0694–AF19 in all comments and in 

the subject line of email comments. 

FOR FURTHER INFORMATION CONTACT: 

Karen H. Nies-Vogel, Chair, End-User 

Review Committee, Bureau of Industry 

and Security, U.S. Department of 

Commerce, 14th St. and Pennsylvania 

Avenue NW., Washington, DC 20230; by 

telephone: (202) 482–5991, fax: (202) 

482–3911, or email: ERC@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Authorization Validated End-User 

(VEU) 

BIS amended the EAR in a final rule 

on June 19, 2007 (72 FR 33646), to 

create a new authorization for 

‘‘validated end-users’’ (VEUs) located in 

eligible destinations to which eligible 

items may be exported, reexported, or 

transferred (in-country) under a general 

authorization instead of a license. 

VEUs may obtain eligible items that 

are on the Commerce Control List, 

which are identified in Supplement No. 

7 to part 748 of the EAR, without having 

to wait for their suppliers to obtain 

export licenses from BIS. Eligible items 

may include commodities, software, and 

technology, except those controlled for 

missile technology or crime control 

reasons. 

The VEUs listed in Supplement No. 7 

to part 748 of the EAR were reviewed 

and approved by the U.S. Government 

in accordance with the provisions of 

section 748.15 and Supplement Nos. 8 

and 9 to part 748 of the EAR. The EndUser Review Committee (ERC), 

composed of representatives from the 

Departments of State, Defense, Energy, 

and Commerce, and other agencies, as 

appropriate, is responsible for 

administering the VEU program. A 

unanimous vote by the ERC is required 

to authorize VEU status for a candidate 

or to add any eligible items to an 

existing authorization. A majority vote 

of the ERC is required to remove VEU 

authorization or to remove eligible items 

from an existing authorization. 

In addition to U.S. exporters, 

Authorization VEU may be used in 

accordance with the provisions of the 

EAR by foreign reexporters and by 

persons transferring in-country. VEUs 

are subject to regular reviews by the 

U.S. Government to ensure that items 

shipped under Authorization VEU are 

used for civilian purposes. In addition, 

VEUs are subject to on-site reviews as 

warranted. 

As of the date of this rule, pursuant 

to section 748.15(b) of the EAR, VEUs 

are located in the People’s Republic of 

China (PRC) and India. 

Amendments to Section 748.15 of the 

EAR 

Prior Notification Requirement 

Through this rule, BIS proposes 

amending the EAR by adding paragraph 

(g)—Notification requirement—to 

section 748.15—Authorization 

Validated End-User. The new paragraph 

(g) would require persons exporting, 

reexporting, or transferring (in-country) 

under Authorization VEU to send 

written notification to the recipient VEU 

with details about their shipment within 

seven days of the shipment. Details that 

would be required in the notification 

include a list of the contents of the 

shipment and the quantity of such items 

that have been or will be shipped to the 

respective VEUs under Authorization 

VEU, as well as a list of the applicable 

Export Control Classification Numbers 

(ECCNs) for items included in the 

shipment under Authorization VEU. 

The purpose of this proposed new 

requirement is to enhance the ability of 

VEUs to comply with the requirements 

of the VEU program. This amendment to 

the EAR is not the result of noncompliance with VEU requirements by 

existing VEUs. Rather, BIS proposes 

making this change at the request of 

VEUs. Some VEUs have informed BIS 

that compliance is challenging when 

they receive items under multiple 

authorizations, but are unable to 

determine which authorization is used 

for each shipment, and thus determine 

which set of conditions applies to the 

items received in each shipment. 

Because items may be shipped to VEUs 

under different forms of authorization 


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22690 Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules 

(e.g., individual licenses, Special 

Comprehensive Licenses, and 

Authorization VEU), VEUs may receive 

items classified under the same ECCN 

but shipped under more than one form 

of authorization. In addition, each form 

of authorization may be accompanied by 

different conditions with which endusers must comply. With this 

amendment to the EAR, BIS intends to 

improve the ability of VEUs to 

determine which authorization their 

suppliers utilized. This will enable 

VEUs to better determine which set of 

conditions governs their use of the 

received item(s) more efficiently, 

thereby increasing the VEUs’ 

compliance. 

BIS is not mandating the form of 

communication (e.g., fax, email, letter) 

for the notification, but does require that 

it be in a written format. As noted 

above, the notification must be 

conveyed to the VEU within seven 

calendar days of shipment to the VEU. 

Exporters, reexporters and VEUs are 

required to maintain the notifications 

they receive pursuant to their 

recordkeeping requirements. 

Clarification Regarding Termination of 

Conditions on VEU Authorizations 

In addition, BIS proposes amending 

section 748.15—Authorization 

Validated End-User—by adding 

paragraph (h)—Termination of 

Conditions on VEU Authorizations. The 

new paragraph (h) clarifies that VEUs 

who are subject to item-specific 

conditions and have received items 

subject to such conditions under 

Authorization VEU would no longer be 

bound by the conditions associated with 

the items if the items no longer require 

a license for export or reexport to the 

PRC or India (depending on the VEU’s 

location) or become eligible for 

shipment under a license exception to 

the destination. This proposed 

amendment would be the same, in 

effect, as existing section 750.7(i) 

(Terminating license conditions), which 

generally applies to exporters and 

reexporters who have shipped under 

license. In addition, a new paragraph (i) 

is added to section 748.15 to remind 

exporters that records requirements for 

shipments that were made under 

Authorization VEU prior to the removal 

of a license requirement or the 

availability of a license exception 

remain subject to the review 

requirements of paragraph (f)(2) of 

section 748.15 on and after the date that 

the license requirement was removed or 

the license exception became 

applicable. 

Since August 21, 2001, the Export 

Administration Act has been in lapse 

and the President, through Executive 

Order 13222 of August 17, 2001 (3 CFR, 

2001 Comp., p. 783 (2002)), as extended 

most recently by the Notice of August 

12, 2011 (76 FR 50661, August 16, 

2011), has continued the EAR in effect 

under the International Emergency 

Economic Powers Act. 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. 

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). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This rule 

has been determined to be not 

significant for purposes of Executive 

Order 12866. 

2. Notwithstanding any other 

provisions of law, no person is required 

to respond to nor 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 (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 proposed 

rule involves information collections 

previously approved by the OMB under 

control number 0694–0088, ‘‘MultiPurpose Application’’, which carries a 

burden hour estimate of 45.8 minutes to 

prepare and submit form B18–748, 

which involves requirements in 

connection with Authorization VEU. 

BIS revised the burden hour estimate 

shown for the 0694–0088 collection by 

two minutes to include the notification 

requirement proposed in this rule. This 

revision does not represent a significant 

increase in burden hours for submitting 

information under the collection. Also, 

the notification requirement proposed 

in this rule is not expected to result in 

an increase in license applications 

submitted to BIS should the agency 

issue the amendment to the EAR in a 

final rule subsequent to the close of the 

proposed rule comment period. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under Executive Order 

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. 

Number of Small Entities 

This proposed rule would affect 

exporters and reexporters shipping to 

VEUs, as well as persons making incountry transfers to VEUs, under 

Authorization VEU. Currently, BIS does 

not collect data on the size of entities 

that export, reexport, or transfer incountry under Authorization VEU. 

Although BIS is unable to estimate the 

number of small entities that would be 

affected by this rule, it does 

acknowledge that this rule will impact 

some unknown number. 

Economic Impact 

This proposed rule requires exporters 

and reexporters shipping to VEUs, as 

well as persons making in-country 

transfers to VEUs, under Authorization 

VEU to provide written notification to 

approved VEUs about VEU shipments. It 

would not require extensive efforts by 

exporters or reexporters, or persons 

making in-country transfers. The 

proposed action is designed to coincide 

with other standard communications 

that exporters and reexporters, 

regardless of size, provide to their 

customers or parties to the transaction 

regarding, among other things, the 

description of items, sales terms, and 

logistics. Specifically, this rule would 

require only that exporters and 

reexporters shipping eligible items 

under Authorization VEU to the finite 

number of approved VEUs at their 

‘‘Eligible Destinations’’ in the PRC and 

India ensure that those VEUs are 

notified in writing within seven days of 

shipping such items under the 

Authorization. Practically, BIS does not 

anticipate that any significant amount of 

time or other resources would be used 

to perform the proposed required action. 

BIS estimates that the notification 

requirement proposed in this rule will 

increase the burden hour estimate by 

two minutes per respondent. Also, the 

notification requirement proposed in 

this rule is not expected to result in an 

increase in license applications 

submitted to BIS should the agency 

issue the amendment to the EAR in a 

final rule subsequent to the close of the 

proposed rule comment period. 

The proposed requirement is intended 

to facilitate compliance with the EAR in 

general and Authorization VEU in 

particular. The proposed requirement 


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Federal Register / Vol. 77, No. 74 / Tuesday, April 17, 2012 / Proposed Rules 22691 

will facilitate the VEUs’ ability to 

comply with the specific conditions 

placed on their qualifications as VEUs 

and distinguish those conditions from 

conditions placed on items received 

under other authorizations. This will 

enhance accountability and ensuring 

effective control of items shipped under 

Authorization VEU and other 

authorizations. 

In addition, this action is likely to 

enhance the attractiveness of shipping 

‘‘Eligible Items’’ under Authorization 

VEU for exporters and reexporters, or 

persons making in-country transfers. 

This potential benefit outweighs any 

perceived inconvenience to exporters 

and reexporters, or persons making incountry transfers, who ship under 

Authorization VEU, as they retain the 

option to ship under an individual 

validated license. 

In this rule, BIS also proposes to 

amend section 748.15—Authorization 

Validated End-User—by adding 

paragraph (h)—Termination of 

Conditions on VEU Authorizations. This 

proposed amendment would clarify that 

VEUs who are subject to item-specific 

conditions and have received items 

subject to such conditions under 

Authorization VEU would no longer be 

bound by the conditions associated with 

the items if the items no longer require 

a license for export or reexport to the 

PRC or India (depending on the VEU’s 

location) or become eligible for 

shipment under a license exception to 

the destination. This proposed 

amendment would be the same, in 

effect, as existing section 750.7(i) 

(Terminating license conditions), which 

generally applies to exporters and 

reexporters who have shipped under 

license. 

For the reasons stated, 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. 

List of Subjects in 15 CFR Part 748 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

Accordingly, part 748 of the Export 

Administration Regulations (15 CFR 

parts 730–774) is proposed to be 

amended as follows: 

PART 748—[AMENDED] 

1. The authority citation for 15 CFR 

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, 2011 (76 FR 50661 (August 16, 

2011)). 

2. Section 748.15 is amended by 

adding paragraphs (g), (h) and (i) to read 

as follows: 

§ 748.15 Authorization Validated End-User 

(VEU). 

* * * * * 

(g) Notification requirement. 

Exporters and reexporters shipping 

under Authorization VEU and persons 

transferring (in-country) under 

Authorization VEU are required to 

provide the validated end-users to 

whom they are shipping notice of the 

shipment. Such notification must be 

conveyed to the VEU in writing and 

must include a list of the contents of the 

shipment and a list of the ECCNs under 

which the items in the shipment are 

classified, as well as a statement that the 

shipment is, will be, or was made 

pursuant to Authorization VEU. 

Notification must be made within seven 

calendar days of the export, reexport or 

transfer (in-country) to the VEU. 

Exporters, reexporters and VEUs are 

required to maintain the notifications 

they receive in accordance with their 

recordkeeping requirements. 

(h) Termination of Conditions on VEU 

Authorizations. VEUs that are subject to 

item-specific conditions and have 

received items subject to such 

conditions under Authorization VEU are 

no longer bound by the conditions 

associated with the items if the items no 

longer require a license for export or 

reexport to the PRC or India, as 

applicable, or become eligible for 

shipment under a license exception to 

the destination. Termination of VEU 

conditions does not relieve a validated 

end-user of its responsibility for 

violations that occurred prior to the 

availability of a license exception or 

prior to the removal of license 

requirements. 

(i) Records. Records of items that were 

shipped under Authorization VEU prior 

to the removal of a license requirement 

or the availability of a license exception 

remain subject to the review 

requirements of paragraph (f)(2) of this 

section on and after the date that the 

license requirement was removed or the 

license exception became applicable. 

Dated: April 10, 2012. 

Kevin J. Wolf, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2012–9237 Filed 4–16–12; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Parts 40 and 46 

[REG–136008–11] 

RIN 1545–BK59 

Fees on Health Insurance Policies and 

Self-Insured Plans for the PatientCentered Outcomes Research Trust 

Fund 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed regulations that implement 

and provide guidance on the fees 

imposed by the Patient Protection and 

Affordable Care Act on issuers of certain 

health insurance policies and plan 

sponsors of certain self-insured health 

plans to fund the Patient-Centered 

Outcomes Research Trust Fund. These 

proposed regulations affect the issuers 

and plan sponsors that are directed to 

pay those fees. This document also 

contains a request for comments and 

provides notice of public hearing on 

these proposed regulations. 

DATES: Written or electronic comments 

must be received by July 16, 2012. 

Requests to speak and outlines of topics 

to be discussed at the public hearing 

scheduled for Wednesday, August 8, 

2012, at 10 a.m., must be received by 

July 30, 2012. 

ADDRESSES: Send submissions to 

CC:PA:LPD:PR (REG–136008–11), 

Internal Revenue Service, P.O. Box 

7604, Ben Franklin Station, Washington, 

DC 20044. Submissions may be handdelivered Monday through Friday 

between the hours of 8 a.m. and 4 p.m. 

to CC:PA:LPD:PR (REG–136008–11), 

Courier’s Desk Internal Revenue 

Service, 1111 Constitution Avenue NW., 

Washington, DC, or sent electronically 

via the IRS Internet site via the Federal 

eRulemaking Portal at 

www.regulations.gov (IRS REG–136008– 

11). The public hearing will be held in 

the IRS Auditorium at the Internal 

Revenue Building, 1111 Constitution 

Avenue NW., Washington, DC. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Rebecca L. Baxter at (202) 622–3970 

(regarding health insurance policies) or 

R. Lisa Mojiri-Azad at (202) 622–6080 

(regarding self-insured health 

arrangements); concerning the 

submission of comments or the public 

hearing, Oluwafunmilayo (Funmi) 


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