Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Notices 53639 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

[Docket No. 100812348–0366–01] 

Best Practices for Transit, 

Transshipment, and Reexport of Items 

Subject to the Export Administration 

Regulations 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Notice of Inquiry. 

SUMMARY: The Department of 

Commerce’s Bureau of Industry and 

Security (BIS) seeks public comments 

on a set of proposed ‘‘Best Practices for 

Transit, Transshipment, and Reexport of 

Items Subject to the Export 

Administration Regulations.’’ BIS is 

particularly interested in engaging in a 

dialogue with industry regarding new 

transshipment principles and best 

practices that complement those already 

identified by BIS in its Web guidance 

(http://www.bis.doc.gov/

complianceandenforcement/emcp.htm), 

and industry outreach regarding export 

management and compliance. BIS will 

consider all comments timely submitted 

before finalizing these best practices and 

publishing them in the Federal Register 

and on the BIS Web site. This document 

will include a discussion of those 

comments. 

DATES: Comments must be received 

before October 18, 2010. 

ADDRESSES: Comments may be 

submitted by e-mail to 

best_practices@bis.doc.gov, by fax at 

(202) 482–5361, or on paper to Gerard 

Horner, Office of Technology 

Evaluation, Bureau of Industry and 

Security, Room 1093, U.S. Department 

of Commerce, 14th Street and 

Pennsylvania Avenue, NW., 

Washington, DC 20230. 

How To Comment 

All comments must be in writing and 

submitted to the address indicated 

above or via e-mail. Comments must be 

received by BIS no later than October 

18, 2010. BIS may consider comments 

received after that date if feasible to do 

so, but such consideration cannot be 

assured. All comments submitted in 

response to this notice will be made a 

matter of public record, and will be 

available for public inspection and 

copying. Anyone submitting business 

confidential information should clearly 

identify the business confidential 

portion of the submission and also 

provide a non-confidential submission 

that can be placed in the public record. 

BIS will seek to protect business 

confidential information from public 

disclosure to the extent permitted by 

law. 

FOR FURTHER INFORMATION CONTACT: 

Office of Technology Evaluation, Gerard 

Horner at ghorner@bis.doc.gov or (202) 

482–2078, or Donald Creed at 

dcreed@bis.doc.gov or (202) 482–8341. 

SUPPLEMENTARY INFORMATION: 

Background 

In this notice of inquiry, BIS is 

seeking public comment on a proposed 

updated list of a set of ‘‘best practices’’ 

for industry regarding the transit, 

transshipment, and reexport of dual-use 

items. The previous list, which was 

developed following the solicitation of 

public comments (68 FR 26567, May 16, 

2003), was posted on BIS’s Web site on 

November 24, 2003. BIS is updating the 

list in light of the U.S. Government’s 

current export control reform efforts and 

the increased attention that reexport, 

transit, and transshipment trade has 

generated in recent years, both within 

the U.S. and globally. BIS will publish 

an updated list of best practices in the 

Federal Register that will include a 

discussion of those comments. BIS will 

also post the final list on the BIS Web 

site. 

The best practices identified herein 

include the types of practices that 

industry has adopted to guard against 

diversion risk. Both government and 

industry recognize that implementing 

effective export compliance programs is 

an important component of responsible 

corporate citizenship and good business 

practices. 

BIS seeks information to refine and 

revise this proposed list of best practices 

to help ensure that industry and the 

government continue to prevent 

diversion of controlled items subject to 

the Export Administration Regulations 

(EAR) through transshipment points. 

The success of export control laws in 

the context of transit, transshipment, 

and reexport transactions rests on wellmanaged and comprehensive export 

compliance programs. The diversion of 

controlled and unlisted U.S. origin 

items from authorized to unauthorized 

end-uses, end-users, or destinations, 

even inadvertently, undermines efforts 

to counter the proliferation of weapons 

of mass destruction, terrorism, and other 

threats to national and international 

security. Global ‘‘transshipment hubs’’— 

i.e., countries or areas that function as 

major hubs for the trading and shipment 

of cargo—pose special risks due to their 

large volumes of transit, transshipment, 

and import and reexport traffic. Such 

hubs make transshipment trade 

particularly vulnerable to the diversion 

of sensitive items to illicit purposes. 

To combat diversion risk, BIS seeks to 

strengthen its partnership with industry 

(including exporters, freight forwarders, 

carriers, consolidators, express couriers, 

and others that are parties to dual-use 

export transactions) involved in the 

transshipment of items subject to the 

EAR by consolidating existing best 

practices and establishing new and 

emerging ones to prevent diversion. BIS 

recognizes the importance of soliciting 

input from industry to define a set of 

best practices tailored to the particular 

activities and circumstances of 

transshipment trade. 

The publication of these best practices 

creates no legal obligation to comply 

with such practices on the part of any 

person, absent a legal requirement that 

is set forth elsewhere in the EAR. 

Compliance with these best practices 

creates no defense to liability for the 

violation of export control laws. 

However, demonstrated compliance 

with these best practices by a company 

will be considered an important 

mitigating factor in administrative 

prosecutions arising out of violations of 

provisions of the EAR that apply to 

transit, transshipment or reexport 

transactions. 

Although BIS intends to issue this 

guidance on industry best practices as it 

applies to items and transactions that 

are subject to the EAR, the guidance 

clearly has broader potential 

application. BIS envisions this guidance 

as a step toward a strengthened dialogue 

with industry, other agencies that 

administer export controls, and foreign 

governments in a manner that may make 

the guidance pertinent beyond its 

application to the EAR. 

Principles 

These best practices are based on the 

following four principles: 

• Industry and government should 

work together in a cooperative 

partnership on a domestic and global 

basis to foster secure trade. 

• Secure trade will reduce the 

incidence of diversion of dual-use items 

to prohibited end-uses and end-users. 

• Effective export management and 

compliance programs will encourage 

expeditious movement of legitimate 

trade. 

• Industry can achieve secure trade 

objectives through quality-driven export 

management and compliance practices. 

Practices 

The following reflect existing and 

emerging transshipment best practices 

that guard against diversion risk. BIS 

seeks comment on these and additional 


hsrobinson on DSK69SOYB1PROD with NOTICES
53640 Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Notices 

practices from the public based on 

experience. 

Best Practice #1. Pay heightened 

attention to the Red Flag Indicators on 

the BIS Web site (see http://www.bis.

doc.gov/Enforcement/redflags.htm) with 

respect to transactions to, from, or 

through transshipment hubs. When a 

company encounters a suspicious 

transaction, such as those outlined in 

the ‘‘Know Your Customer’’ Guidance 

and Red Flags (Supplement No. 3 to Part 

732 of the EAR), it should inquire 

further and attempt to resolve any 

questions raised by the transaction. 

Best Practice #2. An Exporter/ 

Reexporter should seek to utilize only 

those Trade Facilitators/Freight 

Forwarders that also observe these best 

practices and possess their own export 

management and compliance program. 

Best Practice #3. Exporters/ 

Reexporters should have information 

regarding their foreign customers. In 

particular, a company should know if 

the customer is a trading company or 

distributor, and inquire whether the 

customer resells to or has guidelines to 

resell to third parties. 

Best Practice #4. With respect to 

transactions to, from, or through 

transshipment hubs, Exporters/ 

Reexporters should take appropriate 

steps to inquire about the end-user and 

to determine whether the item will be 

reexported or incorporated in an item to 

be reexported. 

Best Practice #5. Freight Forwarders 

should inquire about the details of a 

routed transaction when asked by a 

foreign principal party in interest to 

ship to a country or countries of 

destination or ultimate consignees that 

are different from those provided by the 

U.S. principal party in interest. 

Best Practice #6. An Exporter/ 

Reexporter should communicate the 

appropriate Export Control 

Classification Number (ECCN) or other 

classification information (EAR99) for 

each export/reexport to the end-user 

and, where relevant, to the ultimate 

consignee. 

Best Practice #7. An Exporter/ 

Reexporter should report such ECCN or 

the EAR99 classifications for all export 

transactions, including ‘‘No License 

Required’’ designations to the Trade 

Facilitator/Freight Forwarder or enter 

them in the Automated Export System 

(AES). 

Dated: August 27, 2010. 

Matthew S. Borman, 

Deputy Assistant Secretary for Export 

Administration. 

[FR Doc. 2010–21843 Filed 8–31–10; 8:45 am] 

BILLING CODE 3510–JT–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[Docket No.: 100806330–0330–01] 

Call for Applications for the 

International Buyer Program Calendar 

Year 2012 

AGENCY: International Trade 

Administration, Department of 

Commerce. 

ACTION: Notice and call for applications. 

SUMMARY: This notice sets forth 

objectives, procedures and application 

review criteria associated with support 

for domestic trade shows by the 

International Buyer Program (IBP) of the 

U.S. Department of Commerce (DOC). 

This announcement covers selection for 

International Buyer Program 

participation for calendar year 2012 

(January 1, 2012 through December 31, 

2012). The purpose of the IBP program 

is to bring international buyers together 

with U.S. firms by promoting leading 

U.S. trade shows in industries with high 

export potential. 

DATES: Applications must be received 

by November 1, 2010. 

ADDRESSES: The application may be 

downloaded from http:// 

www.export.gov/IBP. Applications may 

be submitted by any of the following 

methods: (1) Mail/Hand Delivery 

Service: International Buyer Program, 

Global Trade Programs, U.S. and 

Foreign Commercial Service, 

International Trade Administration, 

U.S. Department of Commerce, Ronald 

Reagan Building, 1300 Pennsylvania 

Ave., Ronald Reagan Building, Suite 

800M—Mezzanine Level—Atrium 

North, Washington, DC 20004. 

Telephone (202) 482–4207; (2) 

Facsimile: (202) 482–7800; or (3) e-mail: 

Blanche.Ziv@trade.gov. Facsimile and email applications will be accepted as 

interim applications, but must be 

followed by a signed original 

application that is received by the 

program within five (5) business days 

after the application deadline. To ensure 

that applications are timely received by 

the deadline, applicants are strongly 

urged to send applications by hand 

delivery service (e.g., U.S. Postal Service 

Express Delivery, Federal Express, UPS, 

etc.). 

FOR FURTHER INFORMATION CONTACT: 

Blanche Ziv, Director, International 

Buyer Program, Global Trade Programs, 

U.S. and Foreign Commercial Service, 

International Trade Administration, 

U.S. Department of Commerce, 1300 

Pennsylvania Ave., Ronald Reagan 

Building, Suite 800M—Mezzanine 

Level—Atrium North, Washington, DC 

20004; Telephone (202) 482–4207; 

Facsimile: (202) 482–7800; E-mail: 

Blanche.Ziv@trade.gov. 

SUPPLEMENTARY INFORMATION: The 

International Buyer Program was 

established to bring international buyers 

together with U.S. firms by promoting 

leading U.S. trade shows in industries 

with high export potential. The 

International Buyer Program emphasizes 

cooperation between the DOC and trade 

show organizers to benefit U.S. firms 

exhibiting at selected events and 

provides practical, hands-on assistance 

such as export counseling and market 

analysis to U.S. companies interested in 

exporting. The assistance provided to 

show organizers includes worldwide 

overseas promotion of selected shows to 

potential international buyers, endusers, representatives and distributors. 

The worldwide promotion is executed 

through the offices of the DOC U.S. and 

Foreign Commercial Service (hereinafter 

referred to as the Commercial Service) 

in more than 80 countries representing 

the United States’ major trading 

partners, and also in U.S. Embassies in 

countries where the Commercial Service 

does not maintain offices. 

The Commercial Service is accepting 

applications for the International Buyer 

Program for trade events taking place 

between January 1, 2012 through 

December 31, 2012. Selection of a trade 

show is valid for one event, i.e., a trade 

show organizer seeking selection for a 

recurring event must submit a new 

application for selection for each 

occurrence of the event. Even if the 

event occurs more than once in the 

12-month period covered by this 

announcement, the trade show 

organizer must submit a separate 

application for each event. 

The Commercial Service expects to 

select approximately 35 events from 

among applicants to the program for the 

January 1, 2012 through December 31, 

2012 period. The Commercial Service 

will select those events that are 

determined to most clearly meet the 

Commercial Service’s statutory mandate 

to promote U.S. exports, especially 

those of small—and medium-sized 

enterprises, and that best meet the 

selection criteria articulated below. 

Shows selected for the International 

Buyer Program will provide a venue for 

U.S. companies interested in expanding 

their sales into international markets. 

Successful show organizer applicants 

will be required to enter into a 

Memorandum of Agreement (MOA) 

with the DOC. The MOA constitutes an 

agreement between the DOC and the 

show organizer specifying which 


hsrobinson on DSK69SOYB1PROD with NOTICES