Document ID: BIS-2010-0015-0001
Agency: bis
Document Type: Rule
Title: Issuance of Electronic Documents and Related Recordkeeping Requirements
Posted Date: 2010-04-05T04:00Z

[Federal Register: April 5, 2010 (Volume 75, Number 64)]
[Rules and Regulations]               
[Page 17052-17055]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ap10-9]                         

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740, 748, 750, and 762

[Docket No. 0907201151-0114-02]
RIN 0694-AE66

 
Issuance of Electronic Documents and Related Recordkeeping 
Requirements

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule enables BIS to eliminate the paper versions of most 
export and reexport licenses, notices of denial of license 
applications, notices of return of a license application without 
action, notices of results of classification requests, License 
Exception AGR notification results, and encryption review request 
results. This rule also changes certain recordkeeping requirements 
associated with the elimination of paper documents. BIS is making these 
changes to reduce mailing costs and to free up staff time currently 
devoted to mailing these documents for use in other tasks.

DATES: This rule is effective May 5, 2010.

FOR FURTHER INFORMATION CONTACT: Thomas Andrukonis, Office of Exporter 
Services, Bureau of Industry and Security, U.S. Department of Commerce 
at 202 482 6393 or e-mail tandrukoi@bis.doc.gov

SUPPLEMENTARY INFORMATION:

Background

    The Bureau of Industry and Security administers an export licensing 
program pursuant to the Export Administration Regulations. As part of 
this program, BIS issues various documents in response to applications 
and notifications submitted to BIS by the public. Those documents 
include export licenses, reexport licenses, notices that an export or 
reexport license application has been denied, notices that an export or 
reexport license application is being returned to the applicant without 
action, responses to License Exception AGR notifications, notices of 
the results of classification requests, and notices of the results of 
encryption review requests. Collectively, these documents are referred 
to in this preamble as ``license related documents.''
    Currently, BIS issues license related documents in two ways: 
Electronically in BIS's Simplified Network Application Processing 
Redesign system (SNAP-R) and on paper. Most license related documents 
are issued in both electronic and paper form. However, a few such 
documents are issued only on paper. On December 4, 2009, BIS issued a 
proposed rule that would allow it to eliminate the paper version of the 
license related documents that it currently issues both electronically 
in SNAP-R and on paper (74 FR 63685, December 4, 2009). The last day of 
the comment period for that proposed rule was February 2, 2010. BIS 
received no public comments on that proposed rule. Accordingly, this 
final rule adopts the

[[Page 17053]]

text of the proposed rule and makes one minor correction to pre-
existing text.
    The EAR require that export license applications, reexport license 
applications, License Exception AGR notifications, encryption review 
requests, and classification requests be submitted to BIS 
electronically using SNAP-R, except in individual instances where BIS 
authorizes a paper submission. The license related documents associated 
with a SNAP-R submission are issued on line in SNAP-R where the 
submitter may view, save, or print a copy. In addition, a paper version 
of each of those documents is mailed to the submitter. There are two 
situations in which BIS issues only a paper version of a license 
related document: When BIS authorized a paper submission, and when BIS 
must reissue the license related document because it reopened a matter 
previously considered to be completed. BIS does not intend to stop 
issuing paper license related documents in those two situations. BIS 
also does not intend to change its practices regarding issuance of 
Special Comprehensive Licenses or Special Iraq Reconstruction Licenses, 
both of which are paper-based processes. BIS intends to discontinue 
issuing paper documents in the situations where it currently issues 
both paper and electronic versions of license related documents. BIS is 
also making certain changes to the EAR recordkeeping requirements in 
connection with this change.

Specific Changes Made by This Rule

Clarification That Electronic Notification in SNAP-R Is Considered To 
Be, for Purposes of the EAR, Written Notification of the Results of a 
License Exception AGR Request

    This rule revises Sec.  740.18(c)(5) to state that BIS will issue 
confirmation in SNAP-R or via paper of the decision that no agency has 
objected to a party's proposed use of License Exception AGR. 
Previously, Sec.  740.18(c)(5) merely stated that BIS will issue a 
written confirmation.

Removal of Requirement To Maintain a Log of Electronic Submissions

    This rule removes the requirement previously found in Sec.  
748.7(c) of the EAR to maintain a log of electronic submissions. That 
requirement was established in connection with BIS's initial electronic 
application process, which was instituted in the 1980s. At that time, 
electronic submissions were facilitated by a number of private sector 
vendors and the logs may have been necessary for auditing purposes. 
However, the information required to be kept in the log duplicates 
information that parties are required to include in their SNAP-R 
submissions or that is automatically recorded by SNAP-R, making the 
information in the log redundant of information available to BIS in 
SNAP-R. The rule this log maintenance requirement by removing paragraph 
(c) of Sec.  748.7 and redesignating existing paragraph (d) as 
paragraph (c).

Removal of Language Relating to ``Computer Generated'' Licenses, the 
Department of Commerce Seal and Attachments to Licenses

    This rule revises Sec.  750.7(b) to state that BIS may issue export 
and reexport licenses either electronically or on paper and that each 
license will bear a license number. Previous language regarding 
``computer generated'' licenses, the Department of Commerce seal and 
attachments to licenses have been removed as has an explicit 
requirement that exporters use the license number when communicating 
with BIS about the license. The final rule language allows BIS to 
exercise discretion in deciding whether to issue a license 
electronically in SNAP-R or on paper. However, BIS expects that it will 
issue nearly all licenses electronically. Unless some exceptional 
circumstances exist, only licenses for which the applicant was 
authorized to file the application on paper and licenses that BIS 
cannot issue electronically (currently, only reopened licenses) will be 
issued on paper. BIS is making this change to reduce the costs of 
generating and mailing paper copies of licenses and to be able to 
assign to other tasks the staff that otherwise would be needed to 
handle paper licenses. Because no EAR provision previously addressed 
issuance of the other license related documents with the specificity 
with which Sec.  750.7(b) addresses licenses, only Sec.  750.7(b) must 
be modified to implement this change.

Removal of Requirement To Attach a Replacement License to the Original

    This rule revises Sec.  750.7(h)(4) to remove a requirement that 
the license holder attach a replacement license issued by BIS to the 
original license that it replaces. That requirement dates to an era in 
which electronic licenses did not exist and is impractical with 
electronic licenses issued in SNAP-R. This rule retains the requirement 
that the license holder keep both the original license and the 
replacement license.

Removal of Requirement To Retain Copies of Documents Submitted to BIS 
via the SNAP-R System

    This rule exempts parties who submit documents to BIS via BIS's 
SNAP-R system from requirements to retain copies of documents so 
submitted even though those documents are ``export control documents'' 
as defined in part 772 of the EAR. BIS believes the reliability of the 
SNAP-R system provides adequate assurance that the documents received 
by BIS were submitted and that all submitted documents are received by 
BIS. This change would not preclude parties from storing copies of 
these documents.

Addition of Certain Documents To Recordkeeping Requirements in Part 762

    This rule adds the following documents to the list of documents 
required to be kept as set forth in Sec.  762.2(a)(10) required to be 
kept: Notification from BIS that an application is being returned 
without action; notification from BIS that an application is being 
denied; notification from BIS of the results of a commodity 
classification or encryption review request conducted by BIS. BIS 
believes that requiring recipients of these documents to retain them is 
needed to confirm receipt and to verify that the recipient received 
notice of the terms of the document. This rule does not require parties 
to retain requests for additional information concerning active matters 
that they receive from BIS.

Application of Original Document Retention Requirement to Documents 
Issued in SNAP-R

    Parties who receive documents issued by BIS in SNAP-R may store the 
documents in two ways, and either would meet the requirement of Sec.  
762.5 that original documents be retained. The two ways are: Storage of 
complete documents issued by BIS in SNAP-R electronically in a format 
readable by software possessed by the recipient party; or storage of a 
complete printed paper copy of the document. Either way would provide 
an accurate representation of the contents of the record and, 
therefore, either should be treated as the equivalent of an original 
document. This final rule also makes one minor correction to the 
proposed rule text of Sec.  762.4.
    Section 762.4 consists of one paragraph. When stating that either 
storage method described in this paragraph would be deemed to be an 
original, the proposed rule text used the

[[Page 17054]]

phrase ``for purposes of this paragraph.'' The final rule replaces the 
word ``paragraph'' in that phrase with the word ``section'' to be 
consistent with standard Code of Federal Regulations nomenclature 
practices.

Reasons for the Changes

    BIS has been expending funds and staff time to mail to certain 
parties information that is entirely duplicative of information that 
BIS sends to those same parties electronically. The changes in this 
rule will help BIS to reduce its operating costs and free the staff 
time that otherwise would be devoted to mailing paper documents to be 
used for other purposes. BIS estimates that in recent years it has 
spent approximately $25,000 annually in direct mailing costs 
(envelopes, supplies and postage) to send out paper copies of licenses, 
responses to classification requests, responses to encryption review 
requests, and License Exception AGR notifications. BIS also has been 
spending about 1.5 hours of staff time daily in connection with mailing 
these documents.

Rulemaking Requirements

    1. This rule has been determined to be not significant for purposes 
of E.O. 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor is subject to a penalty for failure to 
comply with, a collection of information, subject to the requirements 
of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), 
unless that collection of information displays a currently valid Office 
of Management and Budget (OMB) Control Number. This regulation contains 
a collection previously approved by OMB under control number 0694-0096 
which carries a burden hour estimate of 58 minutes to prepare and 
submit form BIS-748. Miscellaneous and recordkeeping activities account 
for 12 minutes per submission. BIS believes that the changes 
implemented by this rule will not materially affect this burden. Send 
comments regarding this burden estimate or any other aspect of this 
collection of information, including suggestions for reducing the 
burden, to Jasmeet Seehra, Office of Management and Budget (OMB), by e-
mail to jseehra@omb.eop.gov, or by fax to (202) 395-7285; and to the 
Regulatory Policy Division, Bureau of Industry and Security, Department 
of Commerce, Room 2705, 14th Street and Pennsylvania Ave., NW., 
Washington, DC 20230.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under E.O. 13132.
    4. The Chief Counsel for Regulations of the Department of Commerce 
certified to the Chief Counsel for Advocacy of the Small Business 
Administration at the proposed rule stage that this rule would not have 
a significant economic impact on a substantial number of small 
entities. The rationale for that certification was set forth in the 
preamble to the proposed rule (74 FR 63686, December 4, 2009). BIS 
received no comments on the certification. As a result, a final 
regulatory impact analysis is not required and none has been prepared.

List of Subjects

15 CFR Parts 740, 748, and 750

    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.

0
Accordingly, the Export Administration Regulations (15 CFR parts 730-
774) are amended as follows:

PART 740--[AMENDED]

0
1. The authority citation for part 740 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. 7201 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 13, 2009, 74 FR 41325 (August 14, 2009).

0
2. Section 740.18 is amended by revising the sixth sentence of 
paragraph (c)(5) to read as follows:

Sec.  740.18  Agricultural commodities (AGR).

* * * * *
    (c) * * *
    (5) * * * BIS will issue written confirmation electronically in 
SNAP-R or via paper. * * *
* * * * *

PART 748--[AMENDED]

0
3. 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 13, 2009, 74 
FR 41325 (August 14, 2009).

Sec.  748.7  [Amended]

0
4. Section 748.7 is amended by removing paragraph (c) and redesignating 
paragraph (d) as paragraph (c).

PART 750--[AMENDED]

0
5. The authority citation for part 750 continues to read as follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
Sec. 1503, Pub. L. 108-11, 117 Stat. 559; 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 13, 2009, 74 FR 41325 (August 
14, 2009).

Sec.  750.7  [Amended]

0
6. Section 750.7 is amended by removing the final sentence from 
paragraph (a) and by revising paragraph (b) and paragraph (h)(4) to 
read as follows:

Sec.  750.7  Issuance of licenses.

* * * * *
    (b) Issuance of a license. BIS may issue a license electronically 
via its Simplified Network Application Processing (SNAP-R) system or 
via paper or both electronically and via paper. Each license has a 
license number that will be shown on the license.
* * * * *
    (h) * * *
    (4) Replacement license. If you have been issued a ``replacement 
license'' (for changes to your original license not covered in 
paragraph (c) of this section), you must retain both the original and 
the replacement license.
* * * * *

PART 762--[AMENDED]

0
7. 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 
13, 2009, 74 FR 41325 (August 14, 2009).

Sec.  762.2  [Amended]

0
8. Section 762.2 is amended by:
0
a. Revising paragraph (a)(1),
0
b. Removing the comma and the word ``and'' from the end of paragraph 
(a)(9) and adding in their place, a semicolon,
0
c. Redesignating paragraph (a)(10) as paragraph (a)(11), and
0
d. Adding a new paragraph (a)(10) to read as follows:

Sec.  762.2  Records to be retained.

    (a) * * *
    (1) Export control documents as defined in part 772 of the EAR, 
except

[[Page 17055]]

parties submitting documents electronically to BIS via the SNAP-R 
system are not required to retain copies of documents so submitted;
* * * * *
    (10) Notification from BIS of an application being returned without 
action; notification by BIS of an application being denied; 
notification by BIS of the results of a commodity classification or 
encryption review request conducted by BIS; and,
* * * * *

0
9. Section 762.4 is amended by adding a sentence at the end of the 
section to read as follows:

Sec.  762.4  Original records required.

    * * * With respect to documents that BIS issues to a party in SNAP-
R, either an electronically stored copy in a format that makes the 
document readable with software possessed by that party or a paper 
print out of the complete document is deemed to be an original record 
for purposes of this section.

    Dated: March 29, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-7639 Filed 4-2-10; 8:45 am]
BILLING CODE 3510-33-P