19552 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 730, 742, 748, 762, and 

772 

[Docket No. 131018874–3874–01] 

RIN 0694–AG00 

Proposed Revisions to the Support 

Document Requirements of the Export 

Administration Regulations in 

Response to Executive Order 13563 

Retrospective Regulatory Review 

AGENCY: Bureau of Industry and 

Security, Department of Commerce. 

ACTION: Proposed rule. 

SUMMARY: This rule proposes changes to 

support documents required to be 

submitted for license applications under 

the Export Administration Regulations 

(EAR) and changes to the Bureau of 

Industry and Security’s (BIS’s) role in 

issuing documents for the Import 

Certificate and Delivery Verification 

system. This proposed rule would 

remove the requirement to obtain an 

International Import Certificate or 

Delivery Verification in connection with 

license applications, require a Statement 

by Ultimate Consignee and Purchaser 

for most license applications previously 

requiring an International Import 

Certificate, and increase the license 

application value requirement for 

obtaining a Statement by Ultimate 

Consignee and Purchaser. In addition, 

BIS would cease issuing U.S. Import 

Certificates or Delivery Verifications for 

imports into the United States. Finally, 

this rule revises the structure and 

description of support document 

requirements to improve clarity. BIS is 

proposing these changes in response to 

public comments received in response 

to BIS’s notice of inquiry on 

retrospective regulatory review being 

undertaken under Executive Order 

13563. 

DATES: Comments must be received by 

June 9, 2014. 

ADDRESSES: You may submit comments 

by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. The identification 

number for this rulemaking is BIS– 

2014–0009. 

• By email directly to 

publiccomments@bis.doc.gov. Include 

RIN 0694–AG00 in the subject line. 

• By mail or delivery to Regulatory 

Policy Division, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Room 2099B, 14th Street and 

Pennsylvania Avenue NW., Washington, 

DC 20230. Refer to RIN 0694–AG00. 

FOR FURTHER INFORMATION CONTACT: 

Patricia Muldonian, Office of National 

Security and Technology Transfer 

Controls, 202–482–4479, 

patricia.muldonian@bis.doc.gov. Steven 

Emme, Office of the Assistant Secretary 

for Export Administration, 202–482– 

5491, steven.emme@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

On January 18, 2011, President Barack 

Obama issued Executive Order 13563 to 

improve regulation and regulatory 

review. See 76 FR 3821 (Jan. 21, 2011). 

Among other things, the President 

stressed the need for the regulatory 

system to allow for public participation 

and an open exchange of ideas, as well 

as to promote predictability and reduce 

uncertainty. The President also 

emphasized that regulations must be 

accessible, consistent, written in plain 

language, and easy to understand. 

Under Executive Order 13563, each 

agency is required to ‘‘periodically 

review its existing significant 

regulations to determine whether any 

such regulations should be modified, 

streamlined, expanded, or repealed so 

as to make the agency’s regulatory 

program more effective or less 

burdensome in achieving the regulatory 

objectives.’’ Through a notice of inquiry 

on this retrospective regulatory review 

published on August 5, 2011 (76 FR 

47527), the Bureau of Industry and 

Security (BIS) sought comments on 

aspects of the Export Administration 

Regulations (EAR) that are not 

immediately affected by the Export 

Control Reform initiative and that could 

improve clarity in the EAR or streamline 

requirements to improve efficiency and 

reduce burden. 

Among the public comments 

received, three commenters proposed 

improvements to aspects of the support 

document requirements in part 748 of 

the EAR. Specifically, two commenters 

suggested removing the requirement to 

obtain International Import Certificates 

(ICs) under § 748.10 of the EAR, and one 

commenter recommended that BIS 

explicitly allow the use of electronic 

signatures. After reviewing these 

comments, BIS proposes to amend the 

EAR to remove the requirement for ICs 

under § 748.10, remove the Delivery 

Verification Certificate (DVs) in 

§ 748.13, change certain prior approval 

requirements involving support 

documents to recordkeeping 

requirements, raise the license 

application value threshold for 

requiring the submission of a Statement 

by Ultimate Consignee and Purchaser, 

remove language that suggests the 

preclusion of electronic signatures 

currently in § 748.11, and streamline the 

support document requirements to 

improve clarity. BIS believes that these 

proposals further the aims of Executive 

Order 13563 by tailoring the 

requirements of the EAR to reduce 

unnecessary burdens imposed on 

license applicants while continuing to 

further the national security and foreign 

policy objectives of the United States. 

Proposal To Remove Requirement To 

Obtain International Import Certificate 

or Delivery Verification for Exports, 

Reexports, or Transfers (In-Country) 

Subject to the EAR; Proposal To 

Eliminate Issuance of U.S. Import 

Certificate, U.S. Import Certificate With 

Triangular Transaction Stamp, or 

Delivery Verification Certificate by BIS 

Background 

The current International Import 

Certificate and Delivery Verification (IC/ 

DV) system is a remnant of the 

Coordinating Committee on Multilateral 

Export Controls (COCOM). COCOM was 

a multilateral organization that 

restricted strategic exports to controlled 

countries during the Cold War. On 

March 31, 1994, COCOM disbanded and 

was later replaced by the Wassenaar 

Arrangement on Export Controls for 

Conventional Arms and Dual-Use Goods 

and Technologies. The IC/DV system 

addressed diversion of items from 

COCOM countries or countries 

cooperating with COCOM, and this 

system has remained in place under the 

Wassenaar Arrangement. 

Under the IC/DV system, the importer 

in an international transaction is 

required to certify that it will import the 

goods into the destination country and 

will not reexport or otherwise divert the 

goods without the authorization of the 

government of the importing country. 

This certification takes the form of a 

document issued by the government of 

the importing country. When goods are 

exported to the United States, the 

United States Government may issue a 

U.S. IC (Form BIS–645P/ATF–4522) for 

this purpose. 

Along with the IC (or other 

certification used by foreign 

governments), an importer in an 

international transaction may be 

required to have the government of the 

importing country complete a DV in 

order to give greater assurance to the 

exporter’s country that the importing 

country will be aware and thus in a 

better position to prevent potential 

diversion. When a DV is required, it is 

presented together with evidence of 

entry of the goods for certification by 

the customs authority of the importing 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19553 

country. The form is then delivered 

from the importer to the exporter and 

from the exporter to its export control 

licensing authority. When goods are 

exported to the United States, the 

United States Government may issue a 

DV (Form BIS–647P) when requested for 

this purpose. 

As commenters to the notice of 

inquiry pointed out, while the IC/DV 

system is intended to prevent diversion 

and increase awareness among 

participating countries of potential 

enforcement concerns, the system’s 

utility has diminished over time. While 

the IC provides information about the 

importation of items, it lacks an 

affirmative statement on the actual end 

use of the item by the ultimate 

consignee or end user. Similarly, a DV 

does not provide the same level of 

assurance that a pre-license check or 

post-shipment verification would 

achieve. This lack of utility and 

information under the IC/DV system 

serves little purpose for licensing and 

enforcement operations. Further, many 

countries participating in the Wassenaar 

Arrangement do not require their 

exporters to obtain an IC from the 

country of destination for dual-use 

items. Consequently, the IC/DV system 

imposes additional burdens on the 

public and the U.S. Government 

without achieving the system’s intended 

objectives. 

While the U.S. Government has 

previously attempted to implement 

changes to the IC/DV system through 

the Wassenaar Arrangement, the 

participating countries have not reached 

a consensus on this issue. Since the IC/ 

DV system is not addressed in the 

Wassenaar Arrangement Initial 

Elements and there is no applicable U.S. 

statutory requirement for the IC/DV 

system, BIS is initiating, under national 

discretion, changes to the 

implementation of the IC/DV system 

through this proposed rule. 

Proposed Changes Impacting License 

Applications Submitted to BIS 

In this proposed rule, BIS proposes to 

remove the requirement in § 748.10 to 

obtain an IC for a license application, 

and instead require that the exporter 

obtain a Statement by Ultimate 

Consignee and Purchaser. Under 

§ 748.10, an IC is required for license 

applications of items controlled for 

national security reasons valued over 

$50,000 that are destined for countries 

listed in § 748.9(b)(2), with the 

exception of the People’s Republic of 

China (PRC). This proposed change 

would treat countries in current 

§ 748.9(b)(2) like most other countries 

under the current requirements. This 

proposed change would not, however, 

apply to the PRC or Argentina. License 

applications for the PRC would 

continue to require a PRC End-User 

Statement, as is currently the case under 

§ 748.10. License applications for 

Argentina would be treated like most 

other countries and territories in the 

Americas and only require a support 

document for applications involving 

firearms and related commodities under 

current § 740.14 of the EAR. 

BIS believes that this proposed 

change would significantly reduce 

burden and improve timeliness for 

shipping under an approved license. 

Currently, U.S. exporters must receive a 

signed original of the IC prior to 

shipping commodities under an 

approved license. As one commenter 

pointed out, the time necessary to 

obtain an original IC can be significant. 

Generally, the U.S. exporter would need 

to request that the foreign importer 

obtain an IC from the foreign 

government, the foreign importer would 

have to fill out and submit the IC by 

mail or hand delivery to the foreign 

government, the foreign government 

would have to process and certify the 

IC, the foreign government would have 

to return the IC by mail to the foreign 

importer or have the foreign importer 

pick up the form, the foreign importer 

would have to mail the certified original 

to the U.S. exporter, and the IC may 

have to be translated into English prior 

to submission or record retention. 

Consequently, the current requirement 

to obtain an IC can put U.S. exporters 

at a competitive disadvantage since 

many of the other member states of the 

Wassenaar Arrangement do not require 

their own exporters to obtain an IC from 

other Wassenaar Arrangement member 

states when importing dual-use items. 

To address this time-consuming 

burden, BIS believes that requiring a 

Statement by Ultimate Consignee and 

Purchaser rather than an IC would 

benefit U.S. exporters. Unlike ICs, 

Statements by Ultimate Consignee and 

Purchaser only require the engagement 

of parties directly involved in the 

transaction. Further, U.S. exporters 

currently do not have to wait for an 

original Statement by Ultimate 

Consignee and Purchaser before 

shipping under an approved license so 

long as the exporter receives the original 

within 60 days from the date the 

document is signed by the ultimate 

consignee. In addition to greatly 

reducing burden and delays, this 

proposal would provide greater 

transparency and information for BIS in 

processing license applications and for 

enforcement officials to monitor 

potential concerns. 

To implement these changes for ICs, 

this proposed rule removes all 

references to ICs in § 748.9 of the EAR. 

Further, this proposed rule removes 

references to ICs in § 748.10 while 

maintaining the requirements described 

for the PRC End-User Statement. In 

addition, since BIS is proposing the 

removal of the requirement to obtain an 

IC, this proposed rule also eliminates 

the need for BIS to request that a DV be 

obtained from a foreign government for 

a transaction. As a result, this proposed 

rule eliminates all current text in 

§ 748.13 of the EAR and Supplement 

No. 4 to part 748, which lists contact 

information for the IC/DV authorities of 

foreign governments. 

Proposed Elimination of Issuance of 

U.S. Import Certificate, U.S. Import 

Certificate With Triangular Transaction 

Stamp, and Delivery Verification 

Certificate by BIS 

As described in Supplement No. 5 to 

part 748, BIS currently issues U.S. ICs 

or DVs for items subject to the EAR that 

are controlled for national security 

reasons or for items subject to the 

jurisdiction of the Nuclear Regulatory 

Commission. BIS may also issue a U.S. 

IC with a triangular transaction stamp 

when the U.S. importer in a transaction 

is uncertain whether the items in 

question will be imported into the 

United States or knows that the items 

will not be imported into the United 

States. As previously mentioned, the 

issuance of a U.S. IC or DV provides 

little utility to the U.S. Government or 

to the foreign country granting an export 

license as no representation is made by 

the ultimate consignee or end user on 

the documents. Eliminating the review, 

processing, and issuance of U.S. ICs and 

DVs will allow BIS to focus its resources 

on more effective methods to adjudicate 

license applications and focus its efforts 

on the risk of diversion. Consequently, 

under this proposed rule, BIS would 

cease accepting Form BIS–645P and 

BIS–647P and thus cease issuing a U.S. 

IC or DV when requested by a foreign 

government. Accordingly, this rule 

proposes to remove and reserve 

Supplement No. 5 to part 748 and to 

remove entries for information 

collections related to ICs and DVs in 

Supplement No. 1 to part 730. 

This proposal would not impact the 

participation by other agencies of the 

U.S. Government in the IC/DV system. 

Currently, the Department of Justice’s 

Bureau of Alcohol, Tobacco, Firearms 

and Explosives issues U.S. ICs for the 

permanent import of defense articles 

described on either the U.S. Munitions 

List (USML) in 22 CFR part 121 or the 

U.S. Munitions Import List in 27 CFR 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19554 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

part 447. Also, should U.S. Government 

documentation acknowledging a 

temporary import of defense articles 

described on the USML in 22 CFR part 

121 be required, U.S. importers may 

obtain a DSP–61 Application/License 

for Temporary Import of Unclassified 

Defense Articles from the Department of 

State’s Directorate of Defense Trade 

Controls. 

Proposal To Increase Value Threshold 

for Requiring a Statement by Ultimate 

Consignee and Purchaser 

Prior to June 19, 2007, the EAR 

applied a consistent value threshold of 

$5,000 for obtaining a support 

document for a license application, with 

the exception of license applications for 

computers destined for the PRC. On 

June 19, 2007, BIS published a final rule 

that increased the value threshold for 

license applications requiring an IC and 

for most license applications requiring a 

PRC End-User Statement. The final rule 

increased the value threshold from 

$5,000 to $50,000, with the exception of 

license applications for computers and 

certain cameras destined for the PRC. 

The value threshold for a Statement by 

Ultimate Consignee and Purchaser, 

however, remained at $5,000. This 

change resulted in requiring support 

documents for more license applications 

involving close allies and regime 

partners for items controlled for reasons 

other than national security than for 

license applications involving the same 

items destined for the PRC. As such, BIS 

believes that the varying value levels 

add to the complexity of support 

document requirements without 

providing a necessary national security 

or foreign policy rationale. 

To address the inconsistency in value 

threshold, this proposed rule raises the 

value of license applications requiring a 

Statement by Ultimate Consignee and 

Purchaser from $5,000 to $50,000. This 

change would further reduce the burden 

for U.S. exporters by eliminating a 

requirement for transactions with 

controlled items valued between $5,000 

and $50,000. As is currently required, 

license applicants may not split an 

order into multiple license applications 

in order to avoid the value threshold 

requiring a Statement by Ultimate 

Consignee and Purchaser. 

Additional proposed changes to part 

748 impacting the Statement by 

Ultimate Consignee and Purchaser are 

addressed herein. 

Proposed Revisions to Part 748 To 

Improve Clarity of Support Document 

Requirements 

The current framework for describing 

support document requirements in the 

EAR is found in §§ 748.9 through 

748.14. The proposal to remove the 

requirement to obtain ICs and DVs 

affords BIS the opportunity to 

streamline the framework of the support 

document requirements and improve 

clarity. This proposed rule revises 

§ 748.6(a) to provide greater clarity on 

general instructions for license 

applications and then revises the 

framework in current §§ 748.9 through 

748.14 as follows: 

Proposed § 748.9 

Section 748.9 is currently drafted as a 

decision tree to inform readers when a 

support document is required for a 

license application. This framework has 

led to difficulty in clearly and 

efficiently determining whether a 

support document is required for a 

specific license application. Under this 

rule, proposed paragraph (a) provides a 

general overview of and need for 

support document requirements. 

Proposed paragraph (b) outlines when a 

support document is required for a 

license application and provides 

citations to the relevant provision that 

further describes the specific support 

document in question. Proposed 

paragraph (c) details when reexport 

license applications and transfer (incountry) license applications would 

require a support document. Proposed 

paragraph (d) lists exceptions to the 

requirements to obtain support 

documents outlined in paragraph (b). 

Proposed paragraph (e) describes 

general requirements for the content of 

all support documents. Proposed 

paragraph (f) incorporates 

recordkeeping information currently in 

§ 748.12(e) and addresses returning 

unused or partially used support 

documents to foreign importers. 

Proposed paragraph (g) parallels the 

language in current § 748.9(h) on the 

impact of a support document on BIS’s 

review of a license application. 

Proposed paragraph (h) contains the 

information on grace periods for 

compliance following regulatory 

changes, which is currently in 

§ 748.12(a). 

Proposed §§ 748.10 Through 748.12 

With the removal of ICs and DVs 

under this proposed rule, the remaining 

support documents would be described 

in separate, consecutive sections— 

§ 748.10 for the PRC End-User 

Statement, § 748.11 for the Statement by 

Ultimate Consignee and Purchaser, and 

§ 748.12 for import certificates for 

firearms and related items. This rule 

also proposes to rename import 

certificates described in current § 748.14 

as FC Import Certificates. This change is 

being made to reduce potential 

ambiguity between the Import 

Certificate for firearms and related items 

in current § 748.14 and the IC in current 

§ 748.10. 

For each description of the support 

documents proposed to remain under 

this rule, BIS is revising and 

reorganizing the descriptions into 

parallel, uniform topics in proposed 

§§ 748.12 through 748.14. Thus, all 

three sections will provide the 

requirements for the applicable support 

document under the following topics— 

(a) requirement to obtain document, (b) 

obtaining the document, (c) content of 

the document, (d) procedures for using 

document with license application, and 

(e) recordkeeping. BIS believes this new 

organization should allow readers to 

more readily identify the applicable 

requirements for each support 

document. 

Proposed § 748.10 

Currently, § 748.10 combines 

requirements for ICs and PRC End-User 

Statements. This proposed rule revises 

§ 748.10 to remove all references to ICs 

and make this section applicable to PRC 

End-User Statements only. Under this 

proposed rule, paragraph (a) separates 

the three combinations of commodity 

and value thresholds requiring a PRC 

End-User Statement rather than listing 

all three in one paragraph. In addition, 

this proposed rule attempts to tighten 

the language of the requirements to 

make clear the applicability of the value 

thresholds. For example, if a license 

application is submitted to export 

cameras controlled under ECCN 6A003 

to the PRC, the value of the 6A003 

cameras must be over $5,000 to generate 

a requirement for a PRC End-User 

Statement. If the same order includes 

other items that do not require a license, 

the value of the other items should not 

be factored in to the $5,000 value 

threshold for 6A003 cameras. However, 

if the license application includes 

6A003 cameras valued at, for example, 

$4,000 and includes other commodities 

requiring a license to the PRC valued at 

$47,000, a PRC End-User Statement 

would still be required because the 

cumulative total of commodities 

requiring a license to the PRC exceeds 

$50,000. 

Proposed paragraph (b) provides 

information in current § 748.10(c)(1) 

and Supplement No. 4 to part 748. 

Proposed paragraph (c) provides 

information in current § 748.10(c)(2), 

(c)(3), and (h). Proposed paragraph (d) 

largely reflects information in current 

§ 748.9(c), (e), (f), and (h). Proposed 

paragraph (e) details the recordkeeping 

requirements and amends the current 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19555 

procedure in § 748.9(j), which describes 

the process by which exporters must 

submit the PRC End-User Statement and 

other information to BIS for 

determination on whether a PRC EndUser Statement may be returned to the 

foreign importer. This proposed rule 

removes the submission requirement 

and instead adds a recordkeeping 

obligation, thereby simplifying the 

process and reducing the burden for 

both exporters and the U.S. 

Government. 

Specific Changes in Proposed § 748.11 

Under this proposed rule, information 

regarding the Statement by Ultimate 

Consignee and Purchaser would remain 

under § 748.11, but this section would 

be amended to reflect the changes in 

requirements to obtain a Statement by 

Ultimate Consignee and Purchaser due 

to the removal of ICs. Within this 

section, proposed paragraph (a) 

describes the revised requirement to 

obtain a Statement by Ultimate 

Consignee and Purchaser to reflect that 

license applications currently requiring 

an IC under § 748.10 would now require 

a Statement by Ultimate Consignee and 

Purchaser, unless the items are destined 

for Argentina. To conform to this 

change, the requirement in proposed 

paragraph (a) applies to destinations not 

located in the ‘‘Americas.’’ The 

proposed definition of ‘‘Americas’’ in 

part 772, which is derived from the list 

of countries found in current 

§ 748.9(a)(1), provides the list of 

countries and territories that are 

considered to be in the Americas for 

purposes of the EAR. The definition 

makes clear, however, that while Cuba 

would geographically be considered 

part of the Americas, it does not fall 

under the definition in part 772 and 

would thus be subject to the 

requirement for obtaining a Statement 

by Ultimate Consignee and Purchaser. 

Proposed paragraph (a) also describes 

the limited use of a Statement by 

Ultimate Consignee and Purchaser for 

license applications involving the PRC. 

Currently, § 748.9(b)(2)(i) addresses the 

use of a Statement by Ultimate 

Consignee and Purchaser for limited 

applications involving the PRC. The 

proposed paragraph (a) also includes a 

new Note 2 to paragraph (a) that would 

allow BIS to require applicants to obtain 

a Statement by Ultimate Consignee and 

Purchaser for a license application even 

if one would not otherwise be required. 

This note would conform to current 

§ 748.10(b)(3)(iii) for ICs and PRC EndUser Statements. 

Proposed paragraph (b) incorporates 

text from current § 748.11(c). Proposed 

paragraph (c) incorporates the current 

text of § 748.11(d) and (e). Proposed 

paragraph (d) consolidates text in 

current §§ 748.9(c)(2), 748.9(e), and 

748.11(b). In addition, proposed 

paragraph (d) changes the current 

requirement on when to submit a copy 

of the Statement by Ultimate Consignee 

and Purchaser with the license 

application into a recordkeeping 

requirement. Also, this proposed rule 

removes references to wording such as 

‘‘original statement’’ and ‘‘manually 

signed original’’ in proposed paragraph 

(d) to allow for the use of electronic 

signatures. Proposed paragraph (e) 

retains the current requirements on 

recordkeeping in § 748.11(b). 

Proposed § 748.12 

This proposed rule reorganizes the 

information in current § 748.12 and 

generally places such information in 

proposed §§ 748.9 or 748.13. In its 

place, this proposed rule moves the 

information on Import Certificates or 

equivalent documents for license 

applications of firearms and related 

commodities (to be collectively renamed 

FC Import Certificates) from § 748.14 to 

§ 748.12 to position it next to the 

requirements for the other support 

documents in §§ 748.10 and 748.11. 

With the exception of proposed 

§ 748.12(e), this proposed rule makes no 

substantive changes to the information 

in current § 748.14. Proposed § 748.12(e) 

combines the requirements applicable to 

returning the Import Certificate or 

equivalent statement to the foreign 

importer under current §§ 748.9(j) and 

748.14(j) and replaces the submission 

requirement with a recordkeeping 

requirement. This is similar to the text 

proposed in § 748.10(e) for PRC EndUser Statements. 

Proposed § 748.13 

With the proposed removal of the 

requirement to obtain an IC in § 748.10, 

this proposed rule also removes the text 

describing DVs in current § 748.13. This 

rule proposes to move information on 

granting exceptions to the support 

document requirements from current 

§ 748.12(c) and (d) to proposed § 748.13. 

Additional Revisions to Part 748 

Since this rule proposes to move the 

section on FC Import Certificates from 

§ 748.14 to § 748.12, this rule proposes 

to remove and reserve § 748.14. In 

addition, this rule proposes to remove 

the table of foreign IC/DV authorities in 

current Supplement No. 4 to part 748 

and replace it with a table providing 

guidance on support document 

requirements. This table would serve as 

guidance only; it is not meant to 

contravene or supersede the support 

document requirements described in 

§§ 748.9 through 748.13. Also, current 

Supplement No. 5 to part 748 would be 

removed and reserved since BIS is 

proposing to no longer issue U.S. ICs or 

DVs. 

Additional Conforming Changes to the 

EAR 

This proposed rule also revises 

§ 742.17 to change a citation reference 

back to part 748 and update the name 

of the FC Import Certificate, revises 

references to the support documents in 

the recordkeeping requirements of 

§ 762.2, and inserts a definition of 

‘‘Americas’’ in § 772.1 for purposes of 

support document requirements in part 

748. This definition updates the list of 

destinations currently in § 748.9(a)(1). 

Export Administration Act 

Since August 21, 2001, the Export 

Administration Act of 1979, as 

amended, has been in lapse. However, 

the President, through Executive Order 

13222 of August 17, 2001, 3 CFR, 2001 

Comp., p. 783 (2002), as amended by 

Executive Order 13637 of March 8, 

2013, 78 FR 16129 (March 13, 2013), 

and as extended by the Notice of August 

8, 2013, 78 FR 49107 (August 12, 2013) 

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 as amended 

by Executive Order 13637. 

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, distribute 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 proposed rule is part of 

BIS’s retrospective regulatory review 

being undertaken under Executive 

Order 13563. This rule has been 

determined to be not significant for 

purposes of Executive Order 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 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19556 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

information displays a currently valid 

OMB control number. This proposed 

rule would affect four collection 

numbers: Approval of Triangular 

Transactions Involving Commodities 

Covered by a U.S. Import Certificate 

(collection number 0694–0009), 

Delivery Verification Certificate (0694– 

0016), International Import Certificate 

(0694–0017), Statement by Ultimate 

Consignee and Purchaser (0694–0021), 

and Import Certificates And End-User 

Certificates (0694–0093). 

Under this proposed rule, BIS would 

cease issuing Import Certificates and 

Delivery Verifications, which are 

addressed in collection numbers 0694– 

0016 and 0694–0017, respectively. This 

would lead to an annual reduction in 

burden of 56 hours for 0694–0016 and 

52 hours for 0694–0017. With the 

removal of Import Certificates under 

0694–0017, this rule would also remove 

Import Certificates requiring a 

Triangular Transaction Stamp, as 

addressed under collection 0694–0009. 

BIS has not received a request for 

approval of a triangular transaction in 

the past ten years, so the removal of this 

information collection would result in a 

reduction of one hour. 

Additionally, this proposed rule 

would amend the requirements for 

support documents required in 

conjunction with a license application. 

Collection number 0694–0093 addresses 

Import Certificates and End-User 

Certificates, changes to Import 

Certificates and End-User Certificates, 

exception requests to Import Certificates 

and End-User Certificates, Delivery 

Verifications, exception requests to 

Delivery Verifications, and related 

recordkeeping. This proposed rule 

would eliminate the requirement for 

obtaining a Delivery Verification in 

conjunction with a license application 

submitted to BIS. This would result in 

an annual reduction in burden of 361 

hours for Delivery Verifications and 0.5 

hours for Delivery Verification 

exception requests. Also, this rule 

would eliminate the requirement to 

obtain an Import Certificate in 

conjunction with a license application. 

This change would result in the 

reduction of the following annual 

burden hour estimates: 354.5 hours for 

preparing the Import Certificate, 23.6 

hours for recordkeeping related to the 

Import Certificate, 99 hours for changes 

to Import Certificates, and 7 hours for 

Import Certificate exception requests. 

The proposed changes to support 

documents required in conjunction with 

a license application would also impact 

collection number 0694–0021, which 

addresses the Statement by Ultimate 

Consignee and Purchaser. This 

proposed rule would increase the 

license application value threshold for 

requiring a Statement by Ultimate 

Consignee and Purchaser from $5,000 to 

$50,000. In addition, with the exception 

of licenses for Argentina, this proposed 

rule would require obtaining a 

Statement by Ultimate Consignee and 

Purchaser for those license applications 

previously requiring an Import 

Certificate. These proposed changes 

result in a net increase of 135.7 burden 

hours measured under collection 

number 0694–0021. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare an initial regulatory 

flexibility analysis (IRFA) for any rule 

subject to the notice and comment 

rulemaking requirements under the 

Administrative Procedure Act (5 U.S.C. 

553) or any other statute. However, 

under section 605(b) of the RFA, if the 

head of an agency certifies that a rule 

will not have a significant impact on a 

substantial number of small entities, the 

RFA does not require the agency to 

prepare a regulatory flexibility analysis. 

BIS does not collect data on the size of 

entities that apply for and are issued 

export licenses. Although BIS is unable 

to estimate the exact number of small 

entities that would be affected by this 

rule, it acknowledges that this rule 

would affect some unknown number by 

reducing the burden of having to obtain 

certain support documents for certain 

license applications. Therefore, the 

impact on any affected small entities 

will be wholly positive. Pursuant to 

section 605(b), the Chief Counsel for 

Regulation, Department of Commerce, 

submitted a memorandum to the Chief 

Counsel for Advocacy, Small Business 

Administration, certifying that this 

proposed rule, if promulgated, will not 

have a significant impact on a 

substantial number of small entities. 

List of Subjects 

15 CFR Part 730 

Administrative practice and 

procedure, Advisory committees, 

Exports, Reporting and recordkeeping 

requirements, Strategic and critical 

materials. 

15 CFR Part 742 

Exports, Terrorism. 

15 CFR Part 748 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 762 

Administrative practice and 

procedure, Business and industry, 

Confidential business information, 

Exports, Reporting and recordkeeping 

requirements. 

15 CFR Part 772 

Exports. 

For the reasons stated in the 

preamble, the Bureau of Industry and 

Security proposes to amend the Export 

Administration Regulations, 15 CFR 

parts 730, 742, 748, 762, and 772, as 

follows: 

PART 730—[AMENDED] 

■ 1. The authority citation for part 730 

continues to read as follows: 

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

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 

22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 

U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 

U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 

50 U.S.C. app. 5; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; E.O. 11912, 41 FR 15825, 3 CFR, 

1976 Comp., p. 114; E.O. 12002, 42 FR 35623, 

3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 

FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 

12214, 45 FR 29783, 3 CFR, 1980 Comp., p. 

256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 

Comp., p. 608; E.O. 12854, 58 FR 36587, 3 

CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 

28205, 3 CFR, 1994 Comp., p. 899; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 

Comp., p. 356; E.O. 12981, 60 FR 62981, 3 

CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR 

54079, 3 CFR, 1996 Comp., p. 219; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 

Comp., p. 208; E.O. 13222, 66 FR 44025, 3 

CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 

49079, 3 CFR, 2001 Comp., p. 786; E.O. 

13338, 69 FR 26751, 3 CFR, 2004 Comp., p 

168; E.O. 13637 of March 8, 2013, 78 FR 

16129 (March 13, 2013); Notice of January 17, 

2013, 78 FR 4303 (January 22, 2013); Notice 

of May 7, 2013, 78 FR 27301 (May 9, 2013); 

Notice of August 8, 2013, 78 FR 49107 

(August 12, 2013); Notice of September 18, 

2013, 78 FR 58151 (September 20, 2013); 

Notice of November 7, 2013, 78 FR 67289 

(November 12, 2013). 

■ 2. Supplement No. 1 to part 730 is 

amended by removing the rows for 

collection numbers 0694–0009, 0694– 

0016, and 0694–0017. 

PART 742—[AMENDED] 

■ 3. The authority citation for part 742 

continues to read as follows: 

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

U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19557 

42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; Sec. 1503, Pub. L. 108–11, 117 

Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 

1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 

3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 

FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Presidential Determination 

2003–23 of May 7, 2003, 68 FR 26459, May 

16, 2003; Notice of August 8, 2013, 78 FR 

49107 (August 12, 2013); Notice of November 

7, 2013, 78 FR 67289 (November 12, 2013). 

■ 4. Section 742.17 is amended by: 

■ a. Revising the last sentence of 

paragraph (a); 

■ b. Revising ‘‘Import Certificate’’ to 

read ‘‘FC Import Certificate’’ in 

paragraph (b); and 

■ c. Revising paragraph (g). 

The revisions read as follows: 

§ 742.17 Exports of firearms to OAS 

member countries. 

(a) * * * Licenses will generally be 

issued on a Firearms Convention (FC) 

Import Certificate or equivalent official 

document, satisfactory to BIS, issued by 

the government of the importing OAS 

member country. 

* * * * * 

(g) Validity period for licenses. 

Although licenses generally will be 

valid for a period of four years, your 

ability to ship items that require an FC 

Import Certificate or equivalent official 

document under this section may be 

affected by the validity of the FC Import 

Certificate or equivalent official 

document (see § 748.12(d)(4) of the 

EAR). 

PART 748—[AMENDED] 

■ 5. 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 8, 2013, 78 FR 49107 (August 12, 

2013). 

■ 6. Revise § 748.6(a) to read as follows: 

§ 748.6 General instructions for license 

applications. 

(a) Instructions. (1) General 

instructions for filling out license 

applications are in Supplement No. 1 to 

this part. 

(2) License applications may require 

additional information due to the type 

of items requested in the application or 

the characteristics of the transaction. 

Special instructions for applications 

requiring such additional information 

are listed in § 748.8 and described fully 

in Supplement No. 2 to this part. 

(3) License applications may also 

require additional information for 

evaluation of the parties in the 

transaction. Special instructions for 

applications requiring such additional 

information are listed in §§ 748.9 

through 748.13. Additional guidance for 

determining requirements is located in 

Supplement No. 4 to this part. 

* * * * * 

■ 7. Revise § 748.9 to read as follows: 

§ 748.9 Support documents for evaluation 

of foreign parties in license applications. 

(a) Scope. License applicants may be 

required to obtain support documents 

concerning the foreign parties and the 

disposition of the items intended for 

export or reexport. Some support 

documents are issued by foreign 

governments, while other support 

documents are signed and issued by the 

purchaser and/or ultimate consignee. 

For support documents issued by 

foreign governments, any foreign legal 

restrictions or obligations exercised by 

the government issuing the support 

document is in addition to the 

conditions and restrictions placed on 

the transaction by BIS. However, the 

laws and regulations of the United 

States are in no way modified, changed, 

or superseded by the issuance of a 

support document by a foreign 

government. 

(b) Requirements to obtain support 

documents for export license 

applications. Unless an exception in 

paragraph (d) of this section applies, a 

support document is required for the 

following export license applications: 

(1) License applications for exports to 

the People’s Republic of China (PRC). 

License applications for commodities 

ultimately destined for the PRC require 

a PRC End-User Statement for certain 

transactions. Under narrow 

circumstances, a Statement by Ultimate 

Consignee and Purchaser may be 

substituted for a PRC End-User 

Statement. See §§ 748.10 and 

748.11(a)(2) for specific requirements. 

(2) License applications for exports of 

firearms and related commodities to 

member countries of the Organization of 

American States (OAS). License 

applications for firearms or related 

commodities classified under ECCN 

0A984, 0A986, or 0A987 require a 

Firearms Convention (FC) Import 

Certificate when such commodities are 

destined for a member country of the 

OAS. See § 748.12 for specific 

requirements. 

(3) License applications for exports to 

all other destinations that are not 

countries or territories located in the 

‘‘Americas.’’ License applications for 

commodities requiring a license for any 

reason on the Commerce Control List 

may require a Statement by Ultimate 

Consignee and Purchaser if the items are 

ultimately destined for a country (other 

than the PRC) or a territory that is not 

located in the ‘‘Americas.’’ See § 748.11 

for specific requirements and § 772.1 for 

the definition of ‘‘Americas.’’ 

Note to Paragraph (b): For End-Use 

Certificate requirements under the Chemical 

Weapons Convention, see § 745.2 of the EAR. 

(c) Requirement to obtain support 

documents for reexport or transfer (incountry) license applications. If a 

support document would be required 

for an export from the United States 

under paragraph (b) of this section, then 

the same support document would also 

be required for license applications to 

reexport or transfer (in-country) if the 

final destination is a country in Country 

Group D:1 or E:1. 

(d) Exceptions to requirements to 

obtain support documents. (1) Even if a 

support document requirement exists in 

paragraphs (b) or (c) of this section, no 

support document is required for any of 

the following situations: 

(i) The ultimate consignee or 

purchaser is a foreign government(s) or 

foreign government agency(ies), other 

than the government of the People’s 

Republic of China. To determine 

whether the parties in a transaction 

meet the definition of ‘‘foreign 

government agency,’’ refer to the 

definition contained in part 772 of the 

EAR. If either the ultimate consignee or 

purchaser is not a foreign government or 

foreign government agency, however, a 

support document may still be required 

from the nongovernmental party; 

(ii) The license application is filed by, 

or on behalf of, a relief agency registered 

with the Advisory Committee on 

Voluntary Foreign Aid, U.S. Agency for 

International Development, for export to 

a member agency in the foreign country; 

(iii) The license application is 

submitted for commodities for 

temporary exhibit, demonstration, or 

testing purposes; 

(iv) The license application is 

submitted for commodities controlled 

for short supply reasons (see part 754 of 

the EAR); 

(v) The license application is 

submitted under the Special 

Comprehensive License procedure 

described in part 752 of the EAR; 

(vi) The license application is 

submitted for software or technology; or 

(vii) The license application is 

submitted for encryption commodities 

controlled under ECCN 5A002 or 5B002. 

(2) BIS will consider granting an 

exception to the requirement for 

obtaining a support document where the 

requirements cannot be met due to 

circumstances beyond the applicant’s 

control. An exception will not be 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19558 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

granted contrary to the objectives of the 

U.S. export control laws and 

regulations. Refer to § 748.13 of this part 

for specific instructions on procedures 

for requesting an exception. 

(e) Content of support documents. In 

addition to specific requirements 

described for each support document in 

§§ 748.10, 748.11, and 748.12, the use 

and submission of support documents 

must comply with the following 

requirements. 

(1) English translation. All 

abbreviations, coded terms, or other 

expressions on support documents 

having special significance in the trade 

or to the parties to the transaction must 

be explained on an attachment to the 

document. Documents in a language 

other than English must be 

accompanied by an attachment giving 

an accurate English translation, either 

made by a translating service or certified 

by the applicant to be correct. 

Explanations or translations should be 

provided on a separate piece of paper, 

and not entered on the support 

documents themselves. 

(2) Responsibility for full disclosure. 

(i) Information contained in a support 

document cannot be construed as 

extending or expanding or otherwise 

modifying the specific information 

supplied in a license application or 

license issued by BIS. The license 

application covering the transaction 

discloses all facts pertaining to the 

transaction. The authorizations 

contained in the resulting license are 

not extended by information contained 

in the support document regarding 

reexport from the country of 

destination, transfer (in-country), or any 

other facts relative to the transaction 

that are not reported on the license 

application. 

(ii) Misrepresentations, either through 

failure to disclose facts, concealing a 

material fact, or furnishing false 

information, may subject responsible 

parties to administrative or criminal 

action by BIS. 

(iii) In obtaining the required support 

document, the applicant is not relieved 

of the responsibility for full disclosure 

of any other information concerning the 

ultimate destination and end use, end 

user of which the applicant knows, even 

if inconsistent with the representations 

made in the applicable support 

document. The applicant is responsible 

for promptly notifying BIS of any 

change in the facts contained in the 

support document that comes to the 

applicant’s attention. 

(f) Recordkeeping provisions. (1) 

License applicants must retain on file 

the original copy of any support 

document issued in support of a license 

application submitted to BIS. All 

recordkeeping provisions in part 762 

apply to this requirement, except that 

reproductions may not be substituted 

for the officially authenticated, original 

support document. To ensure 

compliance with this recordkeeping 

requirement, BIS may require 

applicants, on a random basis, to submit 

specific original certificates and 

statements that have been retained on 

file. Applicants will be notified in 

writing of any such request. 

(2) See §§ 748.10(e)(2) and 

748.12(e)(2) for recordkeeping 

requirements for returning support 

documents issued by foreign 

governments. 

(g) Effect on license application 

review. BIS reserves the right in all 

respects to determine to what extent any 

license will be issued covering items for 

which a support document has been 

issued. If a support document was 

issued by a foreign government, BIS will 

not seek or undertake to give 

consideration to recommendations from 

the foreign government as to the action 

to be taken on a license application. A 

support document will be only one of 

the factors upon which BIS will base its 

licensing action, since end uses and 

other considerations are important 

factors in the decision making process. 

(h) Grace period for complying with 

requirements following regulatory 

change. (1) Whenever the requirement 

for an End-User Statement, Statement by 

Ultimate Consignee or Purchaser, or 

Import Certificate is imposed or 

extended by a change in the regulations, 

the license application need not 

conform to the new support 

documentation requirements for a 

period of 45 days after the effective date 

of the regulatory change published in 

the Federal Register. 

(2) License applications filed during 

the 45 day grace period must be 

accompanied by any evidence available 

to the applicant that will support 

representations concerning the ultimate 

consignee, ultimate destination, and end 

use, such as copies of the order, letters 

of credit, correspondence between the 

applicant and ultimate consignee, or 

other documents received from the 

ultimate consignee. Applicants must 

also identify the regulatory change 

(including its effective date) that 

justifies exercise of the 45 day grace 

period. 

■ 8. Revise § 748.10 to read as follows: 

§ 748.10 People’s Republic of China (PRC) 

End-User Statement. 

(a) Requirement to obtain document. 

Unless the provisions of §§ 748.9(d) or 

748.11(a)(2) apply, a PRC End-User 

Statement is required for any of the 

following license applications for 

commodities destined for China: 

(1) The license application includes 

cameras classified under ECCN 6A003 

and the value of such cameras exceeds 

$5,000; 

(2) The license application includes 

computers requiring a license for any 

reason on the Commerce Control List, 

regardless of the value of the computers; 

or 

(3) The license application includes 

any commodity(ies) requiring a license 

for any reason on the Commerce Control 

List, and the value of the 

commodity(ies) requiring a license 

exceeds $50,000. 

Note 1 to Paragraph (a): If an order meets 

the commodity(ies) and value requirements 

listed above, then a PRC End-User Statement 

is required. An order may not be split into 

multiple license applications solely to avoid 

a requirement to obtain a PRC End-User 

Statement. 

Note 2 to Paragraph (a): If an order 

includes both items that do require a license 

to the PRC and items that do not require a 

license to the PRC, the value of the latter 

items should not be factored in to the value 

thresholds described above. Also, if a license 

application includes 6A003 cameras and 

other items requiring a license to the PRC, 

then the value of the 6A003 cameras should 

be factored into the value threshold 

described in paragraph (a)(3). 

Note 3 to Paragraph (a): On a case-by-case 

basis, BIS may require license applicants to 

obtain a PRC End-User Statement for a 

license application that would not otherwise 

require a PRC End-User Statement under the 

requirements of paragraph (a) of this section. 

(b) Obtaining the document. (1) If a 

PRC End-User Statement is required for 

any reason under paragraph (a) of this 

section, then applicants must request 

that the importer obtain a PRC End-User 

Statement for all items on a license 

application that require a license to the 

PRC for any reason listed on the CCL. 

Applicants must obtain the original PRC 

End-User Statement from the importer. 

(2) PRC End-User Statements are 

issued and administered by the Ministry 

of Commerce; Department of Mechanic, 

Electronic and High Technology 

Industries; Export Control Division I; 

Chang An Jie No. 2; Beijing 100731 

China; Phone: (86)(10) 6519 7366 or 

6519 7390; Fax: (86)(10) 6519 7543; 

http://cys.mofcom.gov.cn/ag/ag.html. 

(c) Content of the document. (1) The 

license applicant’s name must appear 

on the PRC End-User Statement 

submitted to BIS as the applicant, 

supplier, or order party. 

(2) License applicants must ensure 

that the following information is 

included on the PRC End-User 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19559 

Statement signed by an official of the 

Department of Mechanic, Electronic and 

High Technology Industries, Export 

Control Division I, of the PRC Ministry 

of Commerce (MOFCOM), with 

MOFCOM’s seal affixed to it: 

(i) Title of contract and contract 

number (optional); 

(ii) Names of importer and exporter; 

(iii) End user and end use; 

(iv) Description of the commodity, 

quantity and dollar value; and 

(v) Signature of the importer and date. 

(3) After a support document is issued 

by MOFCOM, no corrections, additions, 

or alterations may be made on the 

document by any person. If a license 

applicant desires to explain any 

information contained on the statement, 

the applicant may include a signed 

letter of explanation as part of the 

application. 

Note to paragraph (c): The license 

applicant should furnish the consignee with 

the commodity description contained in the 

CCL to be used in applying for the PRC EndUser Statement. It is also advisable to furnish 

a manufacturer’s catalog, brochure, or 

technical specifications if the commodity is 

new. 

(d) Procedures for using document 

with license application—(1) Timing for 

obtaining PRC End-User Statement and 

submitting license application. License 

applicants must obtain a PRC End-User 

Statement prior to submitting the 

license application. Applicants, 

however, may submit the license 

application upon receipt of a facsimile 

or other legible copy of the PRC EndUser Statement, provided that no 

shipment is made against any issued 

license prior to receipt of the original 

PRC End-User Statement. 

(2) Information necessary for license 

application. License applicants should 

not submit the original or copy of the 

PRC End-User statement with the 

license application. Rather, applicants 

must indicate ‘‘Import/End-User 

Certificate’’ in Block 7 of the application 

with an ‘‘X’’ in the appropriate box. In 

addition, applicants must identify China 

as the originating country and input the 

number of the PRC End-User Statement 

in Block 13 of the application. If a 

license application is submitted without 

either the correct Block or Box marked 

on the application and no exception 

request is made pursuant to § 748.13, 

the license application will be 

immediately returned without action. 

(3) Using a PRC End-User Statement 

for multiple applications. A PRC EndUser Statement may cover more than 

one purchase order and more than one 

item. Where the Statement includes 

items for which more than one license 

application will be submitted, you must 

include in Block 24 on your application, 

or in an attachment to each license 

application submitted against the 

Statement, the following certification: 

I (We) certify that the quantities of items 

shown on this license application, based on 

the PRC End-User Statement identified in 

Block 13 of this license application, when 

added to the quantities shown on all other 

license applications submitted to BIS based 

on the same PRC End-User Statement, do not 

total more than the total quantities shown on 

the above cited PRC End-User Statement. 

(4) Alterations. After a PRC End-User 

Statement is issued by the Government 

of the People’s Republic of China, no 

corrections, additions, or alterations 

may be made on the certificate by any 

person. If an applicant desires to 

explain any information contained on 

the certificate, the applicant may submit 

a signed statement describing such 

information as part of the license 

application. 

(5) Validity period. (i) When a PRC 

End-User Statement is required to 

support one or more license 

applications, an applicant must submit 

the first license application within the 

validity period shown on the PRC EndUser Statement or 6 months from the 

date the PRC End-User Statement was 

signed, whichever is shorter. 

(ii) All subsequent license 

applications supported by the same PRC 

End-User Statement must be submitted 

to BIS within one year from the date the 

first license application supported by 

the same PRC End-User Statement was 

submitted to BIS. 

(e) Recordkeeping—(1) General 

requirement. Original PRC End-User 

Statements used to support license 

applications must be retained on file by 

the applicant. All recordkeeping 

provisions in part 762 apply to this 

requirement, except that reproductions 

may not be substituted for the officially 

authenticated, original PRC End-User 

Statement. 

(2) Returning PRC End-User 

Statement to foreign importer. A foreign 

importer may request that an unused or 

partially used PRC End-User Statement 

be returned. In such circumstances, the 

PRC End-User Statement may be 

returned to the foreign importer 

provided that the applicant makes a 

copy of the PRC End-User Statement 

and attaches to it a printout or copy of 

each license covered by the PRC EndUser Statement as well as a letter of 

explanation citing the foreign importer’s 

request for return of the PRC End-User 

Statement, the license number(s) that 

have been issued against the PRC EndUser Statement (including both 

outstanding and expired licenses), and a 

statement that the PRC End-User 

Statement cannot be used in connection 

with another license application. The 

copies of the PRC End-User Statement, 

license(s), and attached letter of 

explanation must be retained on file 

along with the correspondence with the 

foreign importer in accordance with the 

recordkeeping provisions in part 762 of 

the EAR. 

■ 9. Revise § 748.11 to read as follows: 

§ 748.11 Statement by Ultimate Consignee 

and Purchaser. 

(a) Requirement to obtain document— 

(1) General requirement for all countries 

excluding the PRC. Unless an exception 

in § 748.9(d) or paragraph (a)(3) of this 

section applies, a Statement by Ultimate 

Consignee and Purchaser is required if: 

(i) The license application includes 

item(s) requiring a license for any 

reason on the Commerce Control List 

and such item(s) are valued at over 

$50,000; and 

(ii) The items are destined for a 

country or territory other than the PRC 

or the ‘‘Americas’’ (see § 772.1 for the 

definition of ‘‘Americas’’). 

(2) Permissive substitute of Statement 

by Ultimate Consignee and Purchaser in 

place of PRC End-User Statement. The 

requirement to obtain a support 

document for license applications 

involving the PRC is generally 

determined by § 748.10(a) of the EAR. 

However, a Statement by Ultimate 

Consignee and Purchaser may be 

substituted in place of a PRC End-User 

Statement when the commodities to be 

exported (i.e., replacement parts and 

sub-assemblies) are valued at $75,000 or 

less and are for servicing previously 

exported commodities. 

(3) Exception to general requirement. 

The general requirement described in 

paragraph (a)(1) of this section does not 

apply if the applicant is the same person 

as the ultimate consignee, provided the 

required statements are contained in 

Block 24 on the license application. 

This exemption does not apply, 

however, where the applicant and 

consignee are separate entities, such as 

parent and subsidiary, or affiliated or 

associated firms. 

Note 1 to paragraph (a): If an order meets 

the destination and value requirements listed 

above, then a Statement by Ultimate 

Consignee and Purchaser is required. An 

order may not be split into multiple license 

applications solely to avoid a requirement to 

obtain a Statement by Ultimate Consignee 

and Purchaser. 

Note 2 to paragraph (a): On a case-by-case 

basis, BIS may require license applicants to 

obtain a Statement by Ultimate Consignee 

and Purchaser for a license application that 

would not otherwise require a Statement by 

Ultimate Consignee and Purchaser under the 

requirements of paragraph (a) of this section. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19560 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

(b) Obtaining the document. (1) The 

ultimate consignee and purchaser must 

complete either a statement on company 

letterhead, as described in paragraph 

(c)(1) of this section, or Form BIS–711, 

Statement by Ultimate Consignee and 

Purchaser, as described in paragraph 

(c)(2) of this section. Unless otherwise 

specified, any reference in this section 

to ‘‘Statement by Ultimate Consignee 

and Purchaser’’ applies to both the 

statement on company letterhead and to 

Form BIS–711. 

(2) If the consignee and purchaser 

elect to complete the statement on 

letterhead and both the ultimate 

consignee and purchaser are the same 

entity, only one statement is necessary. 

(3) If the ultimate consignee and 

purchaser are separate entities, separate 

statements must be prepared and 

signed. 

(4) If the ultimate consignee and 

purchaser elect to complete Form BIS– 

711, only one Form BIS–711 (containing 

the signatures of the ultimate consignee 

and purchaser) need be completed. 

(5) Whether the ultimate consignee 

and purchaser sign a written statement 

or complete Form BIS–711, the 

following constraints apply: 

(i) Responsible officials representing 

the ultimate consignee or purchaser 

must sign the statement. ‘‘Responsible 

official’’ is defined as someone with 

personal knowledge of the information 

included in the statement, and authority 

to bind the ultimate consignee or 

purchaser for whom they sign, and who 

has the power and authority to control 

the use and disposition of the licensed 

items. 

(ii) The authority to sign the statement 

may not be delegated to any person 

(agent, employee, or other) whose 

authority to sign is not inherent in his 

or her official position with the ultimate 

consignee or purchaser for whom he or 

she signs. The signing official may be 

located in the United States or in a 

foreign country. The official title of the 

person signing the statement must also 

be included. 

(iii) The consignee and/or purchaser 

must submit information that is true and 

correct to the best of their knowledge 

and must promptly send a new 

statement to the applicant if changes in 

the facts or intentions contained in their 

statement(s) occur after the statement(s) 

have been forwarded to the applicant. 

Once a statement has been signed, no 

corrections, additions, or alterations 

may be made. If a signed statement is 

incomplete or incorrect in any respect, 

a new statement must be prepared, 

signed and forwarded to the applicant. 

(c) Content of the document. If a 

statement on company letterhead will 

be obtained to meet the requirement of 

paragraph (a) of this section, follow the 

requirements described in paragraph 

(c)(1) of this section. If Form BIS–711 

will be obtained to meet the 

requirement of paragraph (a) of this 

section, follow the requirements 

described in paragraph (c)(2) of this 

section. 

(1) Statement on company letterhead. 

Information in response to each of the 

following criteria must be included in 

the statement. If any information is 

unknown, that fact should be disclosed 

in the statement. Preprinted information 

supplied on the statement, including the 

name, address, or nature of business of 

the ultimate consignee or purchaser 

appearing on the letterhead or order 

form is acceptable but will not 

constitute evidence of either the signer’s 

identity, the country of ultimate 

destination, or end use of the items 

described in the license application. 

(i) Paragraph 1. One of the following 

certifications must be included 

depending on whether the statement is 

proffered in support of a single license 

application or multiple license 

applications: 

(A) Single. This statement is to be 

considered part of a license application 

submitted by [name and address of 

applicant]. 

(B) Multiple. This statement is to be 

considered a part of every license 

application submitted by [name and 

address of applicant] until two years 

from the date this statement is signed. 

(ii) Paragraph 2. One or more of the 

following certifications must be 

included. Note that if any of the facts 

related to the following statements are 

unknown, this must be clearly stated. 

(A) The items for which a license 

application will be filed by [name of 

applicant] will be used by us as capital 

equipment in the form in which 

received in a manufacturing process in 

[name of country] and will not be 

reexported or incorporated into an end 

product. 

(B) The items for which a license 

application will be filed by [name of 

applicant] will be processed or 

incorporated by us into the following 

product(s) [list products] to be 

manufactured in [name of country] for 

distribution in [list name of country or 

countries]. 

(C) The items for which a license 

application will be filed by [name of 

applicant] will be resold by us in the 

form in which received for use or 

consumption in [name of country]. 

(D) The items for which a license 

application will be filed by [name of 

applicant] will be reexported by us in 

the form in which received to [name of 

country or countries]. 

(E) The items received from [name of 

applicant] will be [describe use of the 

items fully]. 

(iii) Paragraph 3. The following two 

certifications must be included: 

(A) The nature of our business is 

[possible choices include: broker, 

distributor, fabricator, manufacturer, 

wholesaler, retailer, value added 

reseller, original equipment 

manufacturer, etc.]. 

(B) Our business relationship with 

[name of applicant] is [possible choices 

include; contractual, franchise, 

distributor, wholesaler, continuing and 

regular individual business, etc.] and we 

have had this business relationship for 

[number of years]. 

(iv) Paragraph 4. The final paragraph 

must include all of the following 

certifications: 

(A) We certify that all of the facts 

contained in this statement are true and 

correct to the best of our knowledge and 

we do not know of any additional facts 

that are inconsistent with the above 

statements. We shall promptly send a 

replacement statement to [name of the 

applicant] disclosing any material 

change of facts or intentions described 

in this statement that occur after this 

statement has been prepared and 

forwarded to [name of applicant]. We 

acknowledge that the making of any 

false statement or concealment of any 

material fact in connection with this 

statement may result in imprisonment 

or fine, or both, and denial, in whole or 

in part, of participation in U.S. exports 

or reexports. 

(B) Except as specifically authorized 

by the U.S. Export Administration 

Regulations, or by written approval from 

the Bureau of Industry and Security, we 

will not reexport, resell, or otherwise 

dispose of any items approved on a 

license supported by this statement: 

(1) To any country not approved for 

export as brought to our attention by the 

exporter; or 

(2) To any person if there is reason to 

believe that it will result directly or 

indirectly in disposition of the items 

contrary to the representations made in 

this statement or contrary to the U.S. 

Export Administration Regulations. 

(C) We understand that acceptance of 

this statement as a support document 

cannot be construed as an authorization 

by BIS to reexport or transfer (in 

country) the items in the form in which 

received even though we may have 

indicated the intention to reexport or 

transfer (in country), and that 

authorization to reexport (or transfer in 

country) is not granted in an export 

license on the basis of information 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19561 

provided in the statement, but as a 

result of a specific request in a license 

application. 

(2) Form BIS–711. Form BIS–711 is 

available at http://www.bis.doc.gov/

index.php/component/rsform/form/21- 

request-bis-forms?task=forms.edit. 

Instructions on completing Form BIS– 

711 are contained in Supplement No. 3 

to this part. The ultimate consignee and 

purchaser may sign a legible copy of 

Form BIS–711. It is not necessary to 

require the ultimate consignee and 

purchaser to sign an original Form BIS– 

711, provided all information contained 

on the copy is legible. 

(d) Procedures for using document 

with license application—(1) Timing for 

obtaining Statement by Ultimate 

Consignee and Purchaser and 

submitting license application—(i) A 

license application may be submitted 

upon receipt of a facsimile or other 

legible copy of the signed statement. 

(ii) All subsequent license 

applications supported by the same 

Statement by Ultimate Consignee and 

Purchaser must be submitted within two 

years of the first application if the 

statement was completed as a single 

transaction statement. If the statement 

was completed as a multiple transaction 

statement, all applications must be 

submitted within two years of signature 

by the consignee or purchaser, 

whichever was last. 

(2) Information necessary for license 

application. (i) Applicants are not 

required to submit a copy of the 

statement with the application. The 

applicant should, however, mark the 

correct Box in Block 7 of the license 

application to notify BIS that a copy of 

the statement is on file with the 

applicant. 

(ii) If a license application is 

submitted without either the correct 

Block or Box marked on the application 

and no exception request is made 

pursuant to § 748.13, the license 

application will be immediately 

returned without action. 

(3) Validity period. (i) When a 

Statement by Ultimate Consignee and 

Purchaser is required to support one or 

more license applications, an applicant 

must submit the first license application 

within 6 months from the date the 

statement was signed, whichever is 

shorter. 

(ii) All subsequent license 

applications supported by the same 

Statement by Ultimate Consignee and 

Purchaser must be submitted within two 

years of the first application if the 

statement was completed as a single 

transaction statement. If the statement 

was completed as a multiple transaction 

statement, all applications must be 

submitted within two years of signature 

by the consignee or purchaser, 

whichever was last. 

(e) Recordkeeping. The applicant 

must, upon receipt, retain the signed 

statement, and both the ultimate 

consignee and purchaser should retain a 

copy of the statement in accordance 

with the recordkeeping provisions 

contained in part 762 of the EAR. 

■ 10. Revise § 748.12 to read as follows: 

§ 748.12 Firearms Convention (FC) Import 

Certificate. 

(a) Requirement to obtain document. 

Unless an exception in § 748.9(d) 

applies, an FC Import Certificate is 

required for license applications for 

firearms and related commodities, 

regardless of value, that are destined for 

member countries of the Organization of 

American States (OAS). This 

requirement is consistent with the OAS 

Model Regulations described in 

§ 742.17. 

(1) Items subject to requirement. 

Firearms and related commodities are 

those commodities controlled for ‘‘FC 

Column 1’’ reasons under ECCNs 

0A984, 0A986, or 0A987. 

(2) Countries subject to requirement. 

(i) OAS member countries include: 

Antigua and Barbuda, Argentina, 

Bahamas, Barbados, Belize, Bolivia, 

Brazil, Canada, Chile, Colombia, Costa 

Rica, Dominica, Dominican Republic, 

Ecuador, El Salvador, Grenada, 

Guatemala, Guyana, Haiti, Honduras, 

Jamaica, Mexico, Nicaragua, Panama, 

Paraguay, Peru, Saint Kitts and Nevis, 

Saint Lucia, Saint Vincent and the 

Grenadines, Suriname, Trinidad and 

Tobago, Uruguay, and Venezuela. 

(ii) [Reserved] 

(3) Equivalent official document in 

place of FC Import Certificate. For those 

OAS member countries that have not yet 

established or implemented an FC 

Import Certificate procedure, BIS will 

accept an equivalent official document 

(e.g., import license or letter of 

authorization) issued by the government 

of the importing country as supporting 

documentation for the export of 

firearms. 

(b) Obtaining the document. 

Applicants must request that the 

importer (e.g., ultimate consignee or 

purchaser) obtain the FC Import 

Certificate or an equivalent official 

document from the government of the 

importing country, and that it be issued 

covering the quantities and types of 

firearms and related items that the 

applicant intends to export. (See 

Supplement No. 6 to this part for a list 

of the OAS member countries’ 

authorities administering the FC Import 

Certificate System.) Upon receipt of the 

FC Import Certificate or its official 

equivalent, the importer must provide 

the original or a certified copy of the FC 

Import Certificate or the original or a 

certified copy of the equivalent official 

document to the license applicant. The 

license applicant shall obtain the 

required documents prior to submitting 

a license application, except as 

provided in paragraphs (d)(2)(i) and 

(d)(2)(ii) of this section. 

(c) Content of the document. The FC 

Import Certificate or its official 

equivalent must contain the following 

information: 

(1) Applicant’s name and address. 

The applicant may be either the 

exporter, supplier, or order party. 

(2) FC Import Certificate Identifier/

Number. 

(3) Name of the country issuing the 

certificate or unique country code. 

(4) Date the FC Import Certificate was 

issued, in international date format (e.g., 

24/12/12 (24 December 2012), or 3/1/99 

(3 January 1999)). 

(5) Name of the agency issuing the 

certificate, address, telephone and 

facsimile numbers, signing officer name, 

and signature. 

(6) Name of the importer, address, 

telephone and facsimile numbers, 

country of residence, representative’s 

name if commercial or government 

body, citizenship, and signature. 

(7) Name of the end user(s), if known 

and different from the importer, 

address, telephone and facsimile 

numbers, country of residence, 

representative’s name if commercial 

(authorized distributor or reseller) or 

government body, citizenship, and 

signature. Note that BIS does not require 

the identification of each end user when 

the firearms and related commodities 

will be resold by a distributor or reseller 

if unknown at the time of export. 

(8) Description of the commodities 

approved for import including a 

technical description and total quantity 

of firearms, parts and components, 

ammunition and parts. 

Note to paragraph (c)(8): You must furnish 

the consignee with a detailed technical 

description of each commodity to be given to 

the government for its use in issuing the FC 

Import Certificate. For example, for shotguns, 

provide the type, barrel length, overall 

length, number of shots, the manufacturer’s 

name, the country of manufacture, and the 

serial number for each shotgun. For 

ammunition, provide the caliber, velocity 

and force, type of bullet, manufacturer’s 

name and country of manufacture. 

(9) Expiration date of the FC Import 

Certificate in international date format 

(e.g., 24/12/12) or the date the items 

must be imported, whichever is earlier. 

(10) Name of the country of export 

(i.e., United States). 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19562 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

(11) Additional information. Certain 

countries may require the tariff 

classification number, by class, under 

the Brussels Convention (Harmonized 

Tariff Code) or the specific technical 

description of a commodity. For 

example, shotguns may need to be 

described in barrel length, overall 

length, number of shots, manufacturer’s 

name and country of manufacture. The 

technical description is not the Export 

Control Classification Number (ECCN). 

(d) Procedures for using document 

with license application—(1) Timing for 

obtaining FC Import Certificate and 

submitting license application. An FC 

Import Certificate or equivalent official 

document can only be used to support 

one license application. An applicant 

may submit an application before 

obtaining the original or certified copy 

of the FC Import Certificate, or the 

official original or certified copy of the 

equivalent document, provided that: 

(i) The applicant has received a 

facsimile or other legible copy of the FC 

Import Certificate or equivalent official 

document at the time the license 

application is filed; and 

(ii) The applicant states on the 

application that a facsimile of the FC 

Import Certificate or equivalent official 

document has been received and that no 

export will be made against the license 

prior to obtaining the original or 

certified copy of the FC Import 

Certificate or the original or certified 

copy of the equivalent official document 

issued by the importing country and 

retaining it on file. Generally, BIS will 

not consider any license application for 

the export of firearms and related 

commodities if the application is not 

supported by an FC Import Certificate or 

its official equivalent. If the government 

of the importing country will not issue 

an FC Import Certificate or its official 

equivalent, the applicant must supply 

the information described in paragraphs 

(c)(1) and (c)(6) through (8) of this 

section on company letterhead. 

(2) Information necessary for license 

application. The license application 

must include the same commodities as 

those listed on the FC Import Certificate 

or the equivalent official document. The 

applicant must clearly note the number 

and date of the FC Import Certificate or 

equivalent official document in Block 

13 for all export license applications 

supported by that Certificate or 

equivalent official document. The 

applicant must also indicate in Block 7 

of the application that the FC Import 

Certificate or equivalent official 

document has been received and will be 

retained on file. 

(3) Alterations. After an FC Import 

Certificate or official equivalent 

document is used to support the 

issuance of a license, no corrections, 

additions, or alterations may be made 

on the FC Import Certificate by any 

person. If an applicant desires to 

explain any information contained on 

the FC Import Certificate or official 

equivalent document, the applicant may 

submit a signed statement with a copy 

of the Import Certificate or official 

equivalent. 

(4) Validity period. FC Import 

Certificates or equivalent official 

documents issued by an OAS member 

country will be valid for a period of one 

year or less. Although licenses generally 

are valid for four years, an applicant’s 

ability to export may be affected by the 

validity of the FC Import Certificate or 

equivalent official document. 

(e) Recordkeeping—(1) General 

requirement. The applicant must obtain 

and retain on file either the original or 

certified copy of the FC Import 

Certificate, or an original or certified 

copy of equivalent official document 

issued by the government of the 

importing country in support of any 

license application for export of 

firearms and related commodities 

classified as ECCN 0A984, 0A986, or 

0A987. Unless otherwise provided in 

this paragraph, all other recordkeeping 

provisions of part 762 of the EAR apply 

to this requirement. 

(2) Returning FC Import Certificate to 

foreign importer. A foreign importer 

may request that an unused or partially 

used FC Import Certificate or equivalent 

official document be returned. In such 

circumstances, the FC Import Certificate 

or equivalent official document may be 

returned to the foreign importer 

provided that you make a copy of the FC 

Import Certificate (or official equivalent) 

and attach to it a copy of the license 

covered by the FC Import Certificate (or 

official equivalent) as well as a letter of 

explanation citing the foreign importer’s 

request for return of the FC Import 

Certificate (or official equivalent), the 

license number that has been issued 

against the FC Import Certificate (or 

official equivalent), and a statement that 

the FC Import Certificate (or official 

equivalent) cannot be used in 

connection with another license 

application. The copies of the FC Import 

Certificate (or official equivalent), 

license, and attached letter of 

explanation must be retained on file 

along with correspondence with the 

importer in accordance with the 

recordkeeping provisions in part 762 of 

the EAR. 

■ 11. Revise § 748.13 to read as follows: 

§ 748.13 Granting of exceptions to the 

support documentation requirements. 

(a) Overview. An exception to 

obtaining the required support 

documentation will be considered by 

BIS; however, an exception will not be 

granted contrary to the objectives of the 

U.S. export control program. A request 

for exception may involve either a 

single transaction or, where the reason 

necessitating the request is continuing 

in nature, multiple transactions. If 

satisfied by the evidence presented, BIS 

may waive the support document 

requirement and accept the license 

application for processing. Favorable 

consideration of a request for exception 

generally will be given in instances 

where the support document 

requirement: 

(1) Imposes an undue hardship on the 

applicant or ultimate consignee (e.g., 

refusal by the foreign government to 

issue the requisite support document 

and such refusal constitutes 

discrimination against the applicant 

and/or ultimate consignee); 

(2) Cannot be complied with (e.g., the 

commodities will be held in a foreign 

trade zone or bonded warehouse for 

subsequent distribution in one or more 

countries); or 

(3) Is not applicable to the transaction 

(e.g., the items will not be imported for 

consumption into the named country of 

destination). 

(b) Procedures for requesting an 

exception. (1) Requests for exception 

must be submitted with the license 

application to which the request relates. 

Where the request relates to more than 

one license application, it should be 

submitted with the first license 

application and referred to in Block 24 

on any subsequent license application. 

The request for exception must be 

submitted in writing on the applicant’s 

letterhead. 

(2) In instances where the applicant is 

requesting an exception from obtaining 

a PRC End-User Statement under 

§ 748.10 or an FC Import Certificate 

under § 748.12, the request must be 

accompanied by a Statement by 

Ultimate Consignee and Purchaser as 

described in § 748.11 of this part. 

(3) At a minimum, the letter request 

must include: 

(i) Name and address of ultimate 

consignee; 

(ii) Name and address of purchaser, if 

different from ultimate consignee; 

(iii) Location of foreign trade zone or 

bonded warehouse if the items will be 

exported to a foreign trade zone or 

bonded warehouse; 

(iv) Type of request, i.e., whether for 

a single transaction or multiple 

transactions; 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 19563 

(v) Full explanation of the reason(s) 

for requesting the exception; 

(vi) Nature and duration of the 

business relationship between the 

applicant and ultimate consignee and 

purchaser shown on the license 

application; 

(vii) Whether the applicant has 

previously obtained or submitted to BIS 

a support document issued in the name 

of the ultimate consignee or purchaser, 

and a list of the Application Control 

Number(s) to which the certificate(s) 

applied; and 

(viii) Any other facts to justify 

granting an exception. 

(4) Action by BIS—(i) Single 

transaction request. Where a single 

transaction is involved, BIS will act on 

the request for exception at the same 

time as the license application with 

which the request is submitted. In those 

instances where the related license 

application is approved, the issuance of 

the license will serve as an automatic 

notice to the applicant that the 

exception was approved. If any 

restrictions are placed on granting of the 

exception, these will appear on the 

approval. If the request for exception is 

not approved, BIS will advise the 

applicant. 

(ii) Multiple transactions request. 

Where multiple transactions are 

involved, BIS will advise the applicant 

of the action taken on the exception 

request. The response from BIS will 

contain any conditions or restrictions 

that BIS finds necessary to impose 

(including an exception termination 

date if appropriate). In addition, a 

written acceptance of these conditions 

or restrictions may be required from the 

parties to the transaction. 

■ 12. Remove and reserve § 748.14. 

■ 13. Revise supplement No. 4 to part 

748 to read as follows: 

Supplement No. 4 to Part 748— 

Guidance on Support Document 

Requirements for License Applications 

Unless an exception under § 748.9(d) 

applies, a support document may be 

required for license applications in the 

following circumstances. 

Support document Destination Commodity/value 

requirements 

Regulatory 

citation(s) 

None (unless FC Import Certificate or 

equivalent official document required 

below for OAS-member countries).

Countries and territories located in the 

‘‘Americas’’ (see definition in § 772.1 

of the EAR; definition specifically excludes Cuba). 

FC Import Certificate or equivalent official document.Organization of American States: Antigua and Barbuda, Argentina, the Bahamas, Barbados, Belize, Bolivia, 

Brazil, Canada, Chile, Colombia, 

Costa Rica, Dominica, Dominican 

Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, 

Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, St. 

Kitts and Nevis, Saint Lucia, Saint 

Vincent and the Grenadines, 

Suriname, Trinidad and Tobago, Uruguay, and Venezuela.

Firearms and related commodities, regardless of value, controlled under 

ECCNs 0A984, 0A986, or 0A987.

§ 748.12. 

PRC End-User Statement ..................... People’s Republic of China (PRC) ....... 6A003 cameras valued above $5,000 ..

Computers regardless of value. 

Commodities requiring a license for 

any reason on the CCL and valued 

above $50,000 

§ 748.10 (see also 

§ 748.11(a)(2)). 

Statement by Ultimate Consignee and 

Purchaser.

All other destinations not listed in this 

table.

Commodities requiring a license for 

any reason on the CCL and valued 

above $50,000.

§ 748.11. 

■ 14. Remove and reserve supplement 

No. 5 to part 748. 

PART 762—[AMENDED] 

■ 15. The authority citation for part 762 

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 

8, 2013, 78 FR 49107 (August 12, 2013). 

■ 16. Section 762.2 is amended by: 

■ a. Revising paragraphs (b)(22) and 

(b)(24); and 

■ b. Removing and reserving paragraph 

(b)(25). 

The revisions read as follows: 

§ 762.2 Records to be retained. 

* * * * * 

(b) * * * 

(22) § 748.10, PRC End-User 

Statement; 

* * * * * 

(24) § 748.12, FC Import Certificate; 

* * * * * 

PART 772—[AMENDED] 

■ 17. The authority citation for part 772 

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 

8, 2013, 78 FR 49107 (August 12, 2013). 

■ 18. Section 772.1 is amended by 

adding the definition for ‘‘Americas’’ in 

alphabetical order to read as follows: 

§ 772.1 Definitions of terms as used in the 

Export Administration Regulations (EAR). 

* * * * * 

Americas. (Part 748) For purposes of 

part 748 of the EAR, the term Americas 

includes the following countries and 

territories: Anguilla, Antigua and 

Barbuda, Argentina, Aruba, Bahamas, 

Barbados, Belize, Bermuda, Bolivia, 

Bonaire, Brazil, British Virgin Islands, 

Canada, Cayman Islands, Chile, 

Colombia, Costa Rica, Curac ̧ao, 

Dominica, Dominican Republic, 

Ecuador, El Salvador, Falkland Islands, 

French Guiana, Greenland, Grenada, 

Guadeloupe, Guatemala, Guyana, Haiti, 

Honduras, Jamaica, Martinique, Mexico, 

Montserrat, Nicaragua, Panama, 

Paraguay, Peru, Saint Barthe ́lemy, Saint 

Kitts and Nevis, Saint Lucia, Saint 

Martin, Saint Pierre and Miquelon, 

Saint Vincent and the Grenadines, Sint 

Maarten, Suriname, Trinidad and 

Tobago, Turks and Caicos, United 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

19564 Federal Register / Vol. 79, No. 68 / Wednesday, April 9, 2014 / Proposed Rules 

1 Investment Company Advertising: Target Date 

Retirement Fund Names and Marketing, Securities 

Act Release No. 9126 (June 16, 2010) [75 FR 35920 

(June 23, 2010)] (‘‘Proposing Release’’). 

2See Default Investment Alternatives Under 

Participant Directed Individual Account Plans, 72 

FR 60452, 60452–53 (Oct. 24, 2007). 

3Morningstar Fund Research, Target Date Series 

Research Paper: 2013 Survey, available at https:// 

corporate.morningstar.com/us/documents/

ResearchPapers/2013TargetDate.pdf (last visited 

Feb. 27, 2014). 

4 17 CFR 230.482. 

5 15 U.S.C. 77a–z–3. 

6 17 CFR 270.34b–1. 

7 15 U.S.C. 80a. 

8We also proposed amendments to rule 482 

under the Securities Act and rule 34b–1 under the 

Investment Company Act to require that certain 

target date fund marketing materials disclose 

information about the risks and considerations that 

are important for an investor who is deciding 

whether to invest in a target date fund. We 

States, Uruguay, and Venezuela. This 

definition also includes locations not 

listed above that are part of the French 

West Indies, Leeward and Windward 

Islands, or Leeward Antilles, but this 

definition intentionally omits Cuba. 

* * * * * 

Dated: April 3, 2014. 

Kevin J. Wolf, 

Assistant Secretary of Commerce for Export 

Administration. 

[FR Doc. 2014–07918 Filed 4–8–14; 8:45 am] 

BILLING CODE 3510–33–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Parts 230 and 270 

[Release Nos. 33–9570; 34–71861; IC– 

31004; File No. S7–12–10] 

RIN 3235–AK50 

Investment Company Advertising: 

Target Date Retirement Fund Names 

and Marketing 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Proposed rule; request for 

additional comment. 

SUMMARY: The Securities and Exchange 

Commission (‘‘Commission’’) is 

reopening the period for public 

comment on rule amendments it 

proposed in 2010, Investment Company 

Advertising: Target Date Retirement 

Fund Names and Marketing, Securities 

Act Release No. 9126 (June 16, 2010). 

Among other things, the proposed 

amendments would, if adopted, require 

marketing materials for target date 

retirement funds (‘‘target date funds’’) to 

include a table, chart, or graph depicting 

the fund’s asset allocation over time, 

i.e., an illustration of the fund’s socalled ‘‘asset allocation glide path.’’ In 

2013, the Commission’s Investor 

Advisory Committee (‘‘Committee’’) 

recommended that the Commission 

develop a glide path illustration for 

target date funds that is based on a 

standardized measure of fund risk as a 

replacement for, or supplement to, the 

proposed asset allocation glide path 

illustration. The Commission is 

reopening the comment period to seek 

public comment on this 

recommendation. 

DATES: The comment period for the 

proposed rule published on June 23, 

2010 (75 FR 35919), is reopened. 

Comments should be received on or 

before June 9, 2014. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/proposed.shtml); 

• Send an email to rule-comments@

sec.gov. Please include File No. S7–12– 

10 on the subject line; or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments to Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number S7–12–10. This file number 

should be included on the subject line 

if email is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/

proposed.shtml). Comments are also 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. All comments 

received will be posted without change; 

we do not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

FOR FURTHER INFORMATION CONTACT: J. 

Matthew DeLesDernier, Senior Counsel, 

at (202) 551–6792, Investment Company 

Rulemaking Office, Division of 

Investment Management, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–8549. 

SUPPLEMENTARY INFORMATION: The 

Commission is reopening the period for 

public comment on proposed rule 

amendments that are intended to 

provide enhanced information to 

investors concerning target date funds 

and reduce the potential for investors to 

be confused or misled regarding these 

funds.1 In particular, the Commission is 

requesting comment on the 

recommendations of the Committee 

relating to the development of a riskbased glide path illustration. 

I. Background 

A target date fund is designed to make 

it easier for investors to hold a 

diversified portfolio of assets that is 

rebalanced automatically among asset 

classes over time without the need for 

each investor to rebalance his or her 

own portfolio repeatedly, and is 

typically intended for investors whose 

retirement date is at or about the fund’s 

stated target date. Target date funds 

generally invest in a diverse mix of asset 

classes, including stocks, bonds, and 

cash and cash equivalents (such as 

money market instruments). As the 

target date approaches and often 

continuing for a significant period 

thereafter, a target date fund shifts its 

asset allocation in a manner that 

generally is intended to become more 

conservative—usually by decreasing the 

percentage allocated to stocks. Target 

date funds have become more prevalent 

in 401(k) plans as a result of the 

designation of these funds as a qualified 

default investment alternative by the 

Department of Labor pursuant to the 

Pension Protection Act of 2006.2 In 

2013, assets of target date funds 

registered with the Commission 

exceeded $500 billion, having grown 

from about $250 billion at the beginning 

of 2010.3

In June 2010, the Commission 

proposed rule amendments intended to 

provide enhanced information to 

investors concerning target date funds 

and to reduce the potential for investors 

to be confused or misled regarding these 

funds. Among other things, the proposal 

would, if adopted, amend rule 482 4

under the Securities Act of 1933 

(‘‘Securities Act’’) 5 and rule 34b–1 6

under the Investment Company Act of 

1940 (‘‘Investment Company Act’’) 7 to 

require certain marketing materials for 

target date funds to include a table, 

chart, or graph depicting the fund’s 

asset allocation over time, i.e., an 

illustration of the fund’s so-called ‘‘asset 

allocation glide path.’’ 8 The proposed 

mstockstill on DSK4VPTVN1PROD with PROPOSALS