Document ID: BIS-2015-0027-0001
Agency: bis
Document Type: Rule
Title: U.S. Industrial Base Surveys Pursuant to the Defense Production Act
Posted Date: 2015-07-15T04:00Z

[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Rules and Regulations]
[Pages 41426-41432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17388]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 702

[Docket No. 140501396-5463-02]
RIN 0694-AG17

U.S. Industrial Base Surveys Pursuant to the Defense Production 
Act of 1950

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule sets forth the policies and procedures of the Bureau 
of Industry and Security (BIS) for conducting surveys to obtain 
information in order to perform industry studies assessing the U.S. 
industrial base to support the national defense pursuant to the Defense 
Production Act of 1950, as amended. Specifically, this rule provides a 
description of BIS's authority to issue surveys; the purpose for the 
surveys and the manner in which such surveys are developed; the 
confidential treatment of submitted information; and the penalties for 
non-compliance with surveys. This rule is intended to facilitate 
compliance with surveys, thereby resulting in stronger and more 
complete assessments of the U.S. industrial base.

DATES: This rule is effective August 14, 2015.

[[Page 41427]]

FOR FURTHER INFORMATION CONTACT: Jason Bolton, Trade and Industry 
Analyst, Office of Technology Evaluation, phone: 202-482-5936 email: 
jason.bolton@bis.doc.gov or Brad Botwin, Director, Industrial Base 
Studies, Office of Technology Evaluation, phone: 202-482-4060 email: 
brad.botwin@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to authorities under section 705 of the Defense Production 
Act of 1950 as amended (DPA) (50 U.S.C. app. 2155) and Sec.  104 of 
Executive Order 13603 of March 16, 2012 (National Defense Resources 
Preparedness, 77 FR 16651, 3 CFR, 2012 Comp., p. 225), the Bureau of 
Industry and Security (BIS) conducts studies that assess the 
capabilities of the U.S. industrial base to support the national 
defense. To produce these studies, BIS may issue surveys to collect 
detailed information related to the health and competitiveness of the 
U.S. industrial base from government sources and private individuals or 
organizations.
    BIS published a proposed rule addressing its authority to conduct 
the studies, the authority to issue surveys to gather data in support 
of the studies, the purpose of the surveys and the manner in which such 
surveys are developed, the confidential treatment of submitted 
information, and the penalties for non-compliance with surveys (see 80 
FR 11350, March 3, 2015). BIS received two comments on the proposed 
rule and is not making any changes to the final rule text in response 
to those comments. This final rule makes no substantive change to the 
proposed rule.

Public Comments and BIS's Response

    BIS received two comments on the proposed rule. They are reproduced 
in their entireties along with BIS's responses below.

    Comment 1.

    ``The Defense Production Act of 1950 was enacted so that [the] 
[P]resident could (1) require business[es] to sign contracts deemed 
necessary for defense, (2) allow the [P]resident to create 
mechanisms that would allow the allocation of goods and services to 
support defense and (3) allow the [P]resident to control civilian 
economy so that scare resource are available for defense. This Act 
was used during for the Cold War, and could be labeled as outdated 
and unnecessary. Under this act, the [P]resident and his staff is 
given a lot of power over the economy. I disagree with the BIS that 
there should be some sort of supervision over this act. From what I 
have researched I have found one use of the Act in 2011, where the 
Government seized equipment from telecommunications companies for 
criminal charges. One incident should not raise alarm of possible 
fraud or misuse. Although I wish that all sections of the government 
could be monitored more, I know that the money spent on the 
oversight of this Act could be spent more effectively elsewhere.''

    Response: Section 705 of the Defense Production Act of 1950 (50 
U.S.C. app. 2155), authorizes the President to, among other things, 
``require such reports and the keeping of such records by, make such 
inspection of the books, records, and other writings, premises or 
property of, and take the sworn testimony of, and administer oaths and 
affirmations to, any person as may be necessary or appropriate, in his 
discretion, to the enforcement or the administration of this Act and 
the regulations or orders issued thereunder.'' In 2003, an amendment to 
that Act made clear that such ``authority . . . includes the authority 
to obtain information in order to perform industry studies assessing 
the capabilities of the United States industrial base to support the 
national defense.'' This rule is designed to set forth policies and 
procedures to facilitate the accurate and timely completion of surveys 
issued by BIS to collect data for these studies. Whether or not the Act 
is outdated and unnecessary is a decision for Congress, and is not 
something to be addressed in this regulation. This regulation is solely 
intended to clearly implement the provisions of Section 705 of the DPA.
    Additionally, BIS does not engage in ``supervision over this act.'' 
The studies that BIS conducts under the DPA are for the purpose of 
assessing the capabilities of the United States industrial base to 
support the national defense. BIS does not seize property under the DPA 
in connection with criminal charges and the proposed rule makes no 
mention of seizure authority.
    Accordingly, BIS is making no changes to the proposed rule in 
response to this comment.

    Comment 2.

    ``The corporation does not posses [sic] the rights of 
citizenship within U.S. borders, privileges or immunity clause 
ensures this within The Constitution of the United States of 
America. Societal roles force us to consider the implications 
surrounding predictive analytics based in Logic while the National 
Identity is a consensus being manufactured through a rational theory 
exercise in speculative risk. Insurers effectively are prohibited 
from utilizing coercion due to the McCarran Ferguson Act, however 
significant concerns exist with regard to the applicability of 
industry influence with-out the force of Anti-trust regulations to 
secure American values toward equality. A proposal to reduce the 
unnecessary burdens establishing this future of regulation, suggests 
the McCarran Ferguson Act may be applied to the Gramm Leech Bliley 
Act as a measured and proportionate Logic introduced to the 
irrational manufacture of consent.

    Response: The proposed rule and this final rule are entirely 
unrelated to the rights of citizenship as they may or may not apply to 
corporations, the privileges and immunities clause of the Constitution 
of the United States, the regulation of insurers, anti-trust law, the 
Gramm Leech Bliley Act, or the McCarran Ferguson Act. The proposed rule 
and this final rule address surveys issued by BIS to collect data for 
studies assessing the capabilities of the United States industrial base 
to support the national defense, consistent with the authorities set 
forth in section 705 of the Defense Production Act of 1950.
    As this comment is unrelated to the BIS activities this rule 
addresses, BIS is making no changes to the final rule in response to 
this comment.

General Description of the Rule

    This rule sets forth procedures intended to facilitate the accurate 
and timely completion of surveys issued by BIS to collect data for 
these studies. This rule sets forth in a single part of the Code of 
Federal Regulations the information about BIS's authority to conduct 
the studies, the authority to issue surveys to gather data in support 
of the studies, the purpose of the surveys and the manner in which such 
surveys are developed, the confidential treatment of submitted 
information, and the penalties for non-compliance with surveys.
    Additionally, this rule explains BIS's procedures for verifying 
that the scope and purpose of the surveys are well defined, and assures 
that the surveys do not solicit data that duplicates adequate and 
authoritative data that is available to BIS from any federal or other 
responsible agency. A survey may require the submission of information 
similar or identical to information possessed by another federal agency 
but that is not available to BIS.
    Based on requests it receives from U.S. Government agencies, BIS 
produces studies to develop findings and policy recommendations for the 
purpose of improving the competitiveness of specific domestic 
industries and technologies critical to meeting national defense and 
essential civilian requirements. These studies may require surveys to 
collect relevant data and assessments of that data and other 
information available to BIS.
    BIS, in cooperation with the requesting agency, selects the persons 
to be surveyed based on the likelihood that they will have information 
relevant to a

[[Page 41428]]

study. That likelihood is related to the person's association with the 
industry sector, material, product, service or technology that is the 
subject of the study. That association may be based on factors such as 
the person's role in directly or indirectly providing, producing, 
distributing, utilizing, procuring, researching, developing, consulting 
or advising on, the industry sector, material, product, service or 
technology that is the subject of the study.
    Whether a person's association with the industry sector, material, 
product, service or technology being assessed is proximate or remote 
does not determine whether that person's association is sufficient for 
inclusion in the survey. For example, information about a supplier of 
raw materials or components that is several transactions removed from 
the production of the product that is the subject of a study may be 
relevant to assessing the capabilities of the U.S. industrial base to 
supply the product to support the national defense. In such a 
situation, the supplier would be included in the survey. The nature of 
the person from whom the information is sought also does not determine 
whether that person's association with the industry sector, material, 
product, service or technology at issue is sufficient for inclusion in 
the survey. Surveys may require information from businesses organized 
for profit, non-profit organizations, academic institutions and 
government agencies.
    To be useful, a study must be comprehensive, accurate and focused 
on the relevant industry sector, material, product, service or 
technology. Therefore, surveys may require information about 
employment, research and development, sources of supply, manufacturing 
processes, customers, business strategy, finances and other factors 
affecting the industry's health and competitiveness. To properly focus 
the survey on the industry sector, material, product, service or 
technology being assessed, BIS may request information about a 
corporation as a whole or information about one or more specified units 
or individual activities of that corporation. The DPA provides both a 
civil remedy and criminal penalties that may be used when recipients of 
surveys do not supply the information sought.
    BIS deems the information supplied in response to survey requests 
to be confidential and is prohibited by law from publishing or 
disclosing such information unless the Under Secretary for Industry and 
Security determines that withholding the information is contrary to the 
interest of the national defense. The authority to make this 
determination, which section 705(d) of the DPA gives to the President, 
has been delegated to relevant agencies, including the Secretary of 
Commerce, by Sec.  802 of Executive Order 13603. The Secretary of 
Commerce re -delegated this authority to the Under Secretary for 
Industry and Security. The DPA provides criminal penalties for any 
person who willfully violates its prohibition on publication or 
disclosure.

Section by Section Description of the Rule

    This rule creates a new part in Title 15, Chapter VII, Subchapter A 
of the Code of Federal Regulations to be designated as 15 CFR part 702. 
This new part is devoted exclusively to BIS's collection of information 
under section 705 of the DPA (50 U.S.C. app. 2155). Placing the new 
part in Subchapter A promotes an orderly and logical regulatory 
structure because all other regulations implementing BIS authorities 
related to the DPA are contained in that subchapter.

Section 702.1

    Section 702.1 sets forth a general description of BIS's authority 
to collect information needed to complete the surveys. The survey 
responses assist BIS in determining the capabilities of the industrial 
base to support the national defense and to develop policy 
recommendations to improve both the international competitiveness of 
specific domestic industries and their ability to meet national defense 
needs.

Section 702.2

    Section 702.2 implements the requirement found in section 705 of 
the DPA (50 U.S.C. app. 2155(a)) to publish regulations by requiring 
BIS personnel of appropriate competence and authority to ensure that 
before a survey is sent to any person for completion; 1) the scope and 
purpose of a survey have been established, 2) the scope and purpose are 
consistent with BIS's authorities under the DPA, and 3) the data 
requested by the survey does not duplicate adequate and authoritative 
data available to BIS from a federal or other authoritative source. A 
survey may require information that is similar or identical to 
information possessed by other federal agencies but not available to 
BIS. The section does not limit the factors that may be considered in 
deciding whether to conduct a survey nor does it modify or replace the 
requirements of the Paperwork Reduction Act. In addition, all surveys 
are reviewed by BIS and by the Office of Management and Budget (OMB) 
pursuant to the Paperwork Reduction Act before they are distributed. 
The OMB review process provides additional assurance that surveys are 
designed to collect only information deemed necessary to meet the scope 
and purpose of a study.

Section 702.3

    Section 702.3 addresses the confidentiality requirements imposed by 
section 705(d) of the DPA (50 U.S.C. app. 2155(d)) and, in accordance 
with that section, provides two procedures by which the restrictions on 
disclosure in section 705(d) would be invoked. First, consistent with 
its current practice, BIS would deem all information submitted in 
response to a survey to be confidential. Second, a person submitting a 
response to a survey may request confidential treatment of the 
information submitted. Although the second procedure is likely to be 
redundant of the first, the statute prohibits disclosure if either the 
government deems the information to be confidential or if the person 
furnishing the information requests confidential treatment. BIS 
concludes that both procedures should be included in the regulations to 
be consistent with the statute. Additionally, Sec.  702.3 notes that 
confidential information shall not be published or disclosed unless the 
Under Secretary for Industry and Security determines that withholding 
the information is contrary to the interest of the national defense. 
The statutory authority of the President to make this determination has 
been delegated to the Under Secretary for Industry and Security. This 
section also repeats the penalties that the statute authorizes for 
persons convicted of willfully violating the prohibition on disclosure.

Section 702.4

    Section 702.4 requires timely, complete and adequate responses to 
surveys. Specifically, the section requires that survey responses be 
returned to BIS within the time frame stated on the initial 
distribution letter or other request for information. The section 
treats a response as ``inadequate'' if it provides information that is 
not responsive to the questions asked or if it provides aggregated 
information when specific information was requested.
    Section 702.4 sets forth the criteria by which BIS may grant either 
an exemption from complying with the survey requirement or an extension 
of time to comply. The grounds for granting an exemption or an 
extension are limited and generally result when

[[Page 41429]]

BIS concludes that the survey recipient lacks information deemed 
relevant to the survey or when compliance with the requirement would be 
unduly burdensome.
    Section 702.4 makes clear that the deadline for complying with a 
survey is not suspended by submitting a request for an exemption or 
extension of time to comply.
    Finally, Sec.  702.4 provides that BIS may return responses that 
are incomplete or inadequate and specify a due date for a complete and 
adequate response.

Section 702.5

    Section 702.5 sets forth the consequences of failure to comply with 
a survey or other request for information. These consequences are 
established by section 705(a) and (c) of the DPA (50 U.S.C. app. 
2155(a) and (c)). If a person does not comply with a survey, BIS may 
serve a subpoena upon that person to compel compliance. If the person 
still does not comply, the government may apply to the U.S. district 
court in any district in which the person is found, resides or 
transacts business for an order requiring such person to comply. The 
district court has authority to punish any failure to comply with the 
order as contempt of court. Persons who are convicted of willfully 
failing to comply with a survey or other request for information may be 
fined not more than $10,000 or imprisoned for not more than one year, 
or both.

Section 702.6

    Section 702.6 defines certain terms used in part 702.
    The word ``confidential'' is defined in terms of section 705(d) of 
the DPA, thereby distinguishing its use in this rule from its use in 
connection with the classification of information for national security 
purposes as set forth in Executive Order 13526 of December 29, 2009, 
Classified National Security Information (75 FR 707; 3 CFR, 2010 Comp., 
p. 298).
    The definition of the term ``person'' is based on the definition of 
``person'' in section 702 of the DPA (50 U.S.C. app. 2152) with some 
additions. The DPA definition reads: ``The term `person' includes an 
individual, corporation, partnership, association, or any other 
organized group of persons, or legal successor or representative 
thereof, or any State or local government or agency thereof.'' Use of 
the word ``includes'' in the statutory definition implies that the list 
following that word is not exhaustive. BIS concludes that the use of 
``includes'' indicates that Congress recognized that the agency 
implementing the DPA would need discretion to identify the types of 
entities that would likely possess information relevant to the subject 
of each industrial base assessment to ensure a comprehensive collection 
of information.
    This rule adds ``The Government of the United States, of the 
District of Columbia, of any commonwealth, territory or possession of 
the United States, or any department, agency or commission thereof.'' 
BIS has concluded that inclusion of the additional entities is within 
its authority under the DPA because the DPA definition prefaces the 
list of entities with the word ``includes,'' and because inclusion of 
the additional entities is necessary to achieve the purpose of the 
statute.
    Based on prior studies, BIS has observed that the U.S. Government 
makes a significant contribution to the industrial base, whether in 
research, technology development, testing, manufacturing, repair and 
overhaul, or trade development. As a result, the U.S. Government is a 
significant source of information regarding the industrial base. 
Similarly, it is plausible that the District of Columbia, commonwealths 
of the United States and other territories and agencies can be survey 
respondents, and therefore have been included to ensure the 
completeness of a survey sample and corresponding assessment.
    The regulatory definition also makes clear that the term 
``corporation, partnership, association, or any other organized group 
of persons'' is not limited to commercial, for-profit enterprises or 
publicly traded corporations.
    The definitions of the terms ``initial distribution letter'' and 
``survey'' each describe a document used in the data collection 
process. The definitions describe those documents based on the way they 
are used in current BIS practice.

Supplement No. 1 to Part 702

    Supplement No. 1 to part 702 provides information that BIS believes 
would be helpful to persons who receive a survey. This information 
includes both a description of the survey and a glossary of terms.

Differences Between This Final Rule and the Proposed Rule

    The definition of ``initial distribution letter'' in Sec.  702.6 in 
the proposed rule contained a sentence that read ``[t]he letter also 
provides BIS contact information.'' In this final rule, the word 
``provides'' has been replaced with the word ``includes'' for 
precision. This final rule also corrects a typographical error that 
appeared in Supplement No.1 to Part 702, introductory text, second 
sentence in the proposed rule. The phrase that read: ``. . . is purely 
in example . . .'' has been corrected to read ``. . . is purely an 
example . . . .'' There are no other differences in regulatory text 
between this final rule and the proposed rule.

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, and other advantages; distributive impacts; and 
equity). Executive Order 13563 emphasizes the importance of quantifying 
both costs and benefits, of reducing costs, of harmonizing rules, and 
of promoting flexibility. This final rule has been determined not to be 
a ``significant regulatory action,'' significant, as that term is 
defined in Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information subject to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et. seq.) unless that 
collection of information displays a currently valid OMB control 
number. This rule does not contain a collection of information that is 
subject to the Paperwork Reduction Act. This rule sets forth procedures 
related to BIS's administration of surveys pursuant to Sec.  705 of the 
DPA (50 U.S.C. app. 2155). Individual surveys that are subject to the 
Paperwork Reduction Act will display a currently valid OMB control 
number.
    3. This rule does not contain policies with Federalism implications 
as that term is defined in Executive Order 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 a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute. However, under Sec.  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

[[Page 41430]]

analysis. Pursuant to Sec.  605(b), the Chief Counsel for Regulation, 
Department of Commerce, submitted a memorandum to the Chief Counsel for 
Advocacy, Small Business Administration, certifying that the proposed 
rule, if promulgated, will not have a significant impact on a 
substantial number of small entities. The proposed rule set forth the 
rationale for that certification. BIS received no comments on that 
rationale and is making no substantive changes to it. The rationale for 
that certification is as follows.

Impact

    This rule sets forth, in a single part of the Code of Federal 
Regulations, the Department of Commerce's authority under Sec.  705 of 
the DPA ``to obtain information in order to perform industry studies 
assessing the capabilities of the United States industrial base to 
support the national defense.'' Since the mid-1980s, BIS and its 
predecessor organizations within the Department of Commerce have 
conducted such studies and required survey responses based on the 
statute. Section 705 of the DPA authorizes the collection of the 
information. The statute also authorizes the issuance of subpoenas for 
the information and authorizes the United States district courts to 
issue orders compelling compliance with such subpoenas. It also 
provides criminal penalties for failure to comply with the government's 
requests for information. This final rule will not require any person 
to supply information that the person would not be required to provide 
pursuant to the statute.
    This final rule requires that surveys issued by BIS pursuant to 
Sec.  705 be responded to by the deadline set forth in the survey. The 
rule incorporates BIS's existing internal policies and standards for 
the granting of both an extension of time to comply with the 
requirement and exemptions from compliance. To the extent that 
publication of these policies and standards in the Code of Federal 
Regulations could be construed as a change in the burden on small 
entities or any other entities, the publication would have to be deemed 
as a reduction in burden because it facilitates access to the standards 
by all parties.
    This final rule also sets forth the statutory standards for 
treating information submitted in response to a survey as confidential. 
It reiterates the statutory penalties for failure to comply with a 
survey and for unauthorized release of information that Sec.  705 
requires to be treated as confidential.
    This rule adopts the statutory definition of ``person'' but also 
adds ``[t]he Government of the United States, of the District of 
Columbia, of any commonwealth, territory or possession of the United 
States, or any department, agency or commission thereof'' to the 
definition. The term ``person'' is used in the statute and in this 
final rule to represent those to whom the requirements of the statute 
and this final rule apply. BIS has historically interpreted the statute 
to apply to units of the U.S. Government (including the District of 
Columbia Government and the governments of the territories and 
possessions) and does not view this as a substantive change. For 
purposes of this certification, the addition is immaterial because the 
government bodies that will be added to the statutory definition by 
this final rule are not small entities under the definition provided in 
the Small Business Regulatory Enforcement Fairness Act of 1996.

Number of Small Entities

    Surveys are one-time exercises used to assess the state and/or 
capabilities of a particular industry sector or technology. Entities 
are selected for participation based on their role in, or relationship 
to, the industry sector or technology being assessed. Information 
obtained during the course of any one assessment may be relevant to 
determining whether the current entity supplying that information is a 
small entity. However, the composition of survey respondents varies 
dramatically between industry studies due to the complexity of each 
industry sector or technology being assessed. Consequently, BIS is 
unable to draw from existing data to estimate the number of small 
businesses participating in future collections. Accordingly, BIS is 
unable to determine the number of small entities that may be affected 
by this final rule.

Conclusion

    Although BIS cannot predict the exact number of small entities that 
will be participating in any one survey, this rule will not impose a 
significant burden on any such small entities because it will not 
require any impacted entity to perform any action that it is not 
already required to perform pursuant to section 705 of the DPA.

List of Subjects in Part 702

    Business and industry, Confidential business information, 
Employment, Penalties, National defense, Research, Science and 
technology.
    Accordingly, the National Security Industrial Base Regulations (15 
CFR Chapter VII, Subchapter A) are amended by adding Part 702 to read 
as follows:

Subchapter A--National Security Industrial Base Regulations

PART 702--INDUSTRIAL BASE SURVEYS--DATA COLLECTIONS

Sec.
702.1 Introduction.
702.2 Scope and purpose of surveys--avoiding duplicative requests 
for information.
702.3 Confidential information.
702.4 Requirement to comply with surveys or other requests for 
information.
702.5 Consequences of failure to comply.
702.6 Definitions.

Supplement No. 1 to Part 702--General Survey Information

    Authority: 50 U.S.C. app. 2061 et seq.; E.O. 13603, 77 FR 16651, 
3 CFR, 2012 Comp., p. 225.

Sec.  702.1  Introduction.

    In accordance with 50 U.S.C. app. 2155, the Bureau of Industry and 
Security (BIS) may obtain such information from, require such reports 
and the keeping of such records by, make an inspection of the books, 
records, and other writings, premises or property of, take the sworn 
testimony of and administer oaths and affirmations to, any person as 
may be necessary or appropriate, in its discretion, to the enforcement 
or the administration of its authorities and responsibilities under the 
Defense Production Act of 1950 as amended (DPA) and any regulations or 
orders issued thereunder. BIS's authorities under the DPA (50 U.S.C. 
app. 2061 et seq.) include authority to collect data via surveys to 
perform industry studies assessing the capabilities of the United 
States industrial base to support the national defense and develop 
policy recommendations to improve both the international 
competitiveness of specific domestic industries and their ability to 
meet national defense program needs.

Sec.  702.2  Scope and purpose of surveys--avoiding duplicative 
requests for information.

    (a) BIS will not send any survey to any person for completion 
unless the scope and purpose of the survey have been established, that 
scope and purpose are consistent with BIS's authorities under the DPA, 
and the data requested by the survey does not duplicate adequate and 
authoritative data already available to BIS from a Federal or other 
authoritative source.
    (b) BIS personnel of appropriate competence and authority will 
ensure that the requirements of paragraph (a) of this section are met.

[[Page 41431]]

    (c) This section shall not be construed as limiting the criteria 
that BIS may consider in determining whether to proceed with a survey. 
This paragraph shall not be construed as replacing or in any way 
modifying the requirements of the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.).

Sec.  702.3  Confidential information.

    This section implements section 705(d) of the DPA.
    (a) BIS deems all information submitted in response to a survey 
issued pursuant to this part to be confidential.
    (b) Any person submitting information in response to a survey 
issued pursuant to this part may request confidential treatment of that 
information.
    (c) The President's authority under the DPA to protect confidential 
information has been delegated to the Under Secretary for Industry and 
Security. The information described in paragraphs (a) and (b) of this 
section shall not be published or disclosed unless the Under Secretary 
for Industry and Security determines that the withholding thereof is 
contrary to the interest of the national defense.
    (d) Any person convicted of willfully violating the prohibition in 
paragraph (c) of this section may be fined not more than $10,000 or 
imprisoned for not more than one year, or both.

Sec.  702.4  Requirement to comply with surveys or other requests for 
information.

    (a) Requirement to comply. Every person who receives a survey or 
other request for information issued pursuant to this part must submit 
a complete and adequate response to BIS within the time frame stated on 
the initial distribution letter or other request for information. 
Survey response information that does not adhere to the survey question 
criteria or that contains only aggregate information in place of 
specified information will be treated as inadequate and therefore 
noncompliant. BIS may exempt persons from this requirement for the 
reasons in paragraph (b) of this section, or grant extensions of time 
to comply as set forth in paragraph (c) of this section. Submitting a 
request to BIS for an exemption or an extension of time for completion 
does not suspend the initial deadline required by BIS (or any extended 
deadline subsequently granted by BIS). Thus, persons who request an 
exemption or extension of time are advised to proceed as if the 
response is required by the deadline until advised otherwise by BIS.
    (b) Grounds for exemption. (1) An exemption from the requirements 
of this section may be granted if the person receiving the survey or 
other request for information:
    (i) Has no physical presence in the United States of any kind;
    (ii) Does not provide, produce, distribute, utilize, procure, 
research, develop, consult or advise on, or have any other direct or 
indirect association with the materials, products, services or 
technology that are within the scope of the survey;
    (iii) Has ceased business operations more than 12 months prior to 
receipt of the survey;
    (iv) Has been in business for less than one year; or
    (v) BIS determines that extenuating circumstances exist that make 
responding impractical.
    (2) BIS may also grant an exemption if, based on the totality of 
the circumstances, it concludes that compliance would be impractical 
and/or that requiring compliance would be unduly time intensive.
    (3) Existence of a pre-existing private non-disclosure agreement or 
information sharing agreement between a person and another party (e.g., 
customers, suppliers, etc.), does not exempt a person from the 
obligation to comply with and complete a survey. The authority to 
conduct the survey and comply with the survey is derived from the DPA, 
and that statutory obligation to comply supersedes any private 
agreement.
    (c) Extensions of time to complete. A person who receives a survey 
or other request for information may request an extension of time to 
submit the complete response to BIS. BIS may grant such an extension of 
time, if, in its judgment, circumstances are such that additional time 
reasonably is needed, the extension would not jeopardize timely 
completion of BIS's overall analysis, and the person is making 
reasonable progress towards completing the survey or response to the 
other request for information. Generally, extensions will be for no 
more than two weeks. A person who receives a survey or other request 
for information may request successive extensions if the person 
believes that it continues to have a legitimate need for additional 
time to complete the survey. BIS will not grant extensions that would 
jeopardize the performance and timely completion of its industrial base 
assessments.
    (d) Procedure for requesting exemptions or extensions of time. 
Requests for exemptions or extensions of time must be made to BIS at 
the telephone number, email address or BIS physical address provided in 
the initial distribution letter for a survey or in the other request 
for information. A request for an exemption must provide factual 
information and documentation that are adequate for BIS to determine 
that one or more of the criteria stated in paragraph (b) or (c) of this 
section are met.
    (e) Responses that are incomplete or inadequate. BIS may return 
responses that are incomplete or inadequate to the person for prompt 
completion. BIS will specify the required period of time permitted for 
completion and submission of the revised survey.

Sec.  702.5  Consequences of failure to comply.

    (a) Civil. If any person fails to comply with the requirements of 
Sec.  702.4, BIS may issue a subpoena requiring that person to submit 
the information called for in the survey. In the case of contumacy or 
refusal to obey such a subpoena, the U.S. Government may apply for an 
order by the United States district court in a district where that 
person resides or transacts business that would compel the person to 
submit the completed survey.
    (b) Criminal. In accordance with 50 U.S.C. app. 2155, any person 
who willfully fails to comply with Sec.  702.4, may, upon conviction, 
be fined not more than $10,000 or imprisoned not more than one year, or 
both.

Sec.  702.6  Definitions.

    The definitions in this section apply throughout this part.
    Confidential. A description of information that is subject to the 
disclosure prohibitions of the DPA (50 U.S.C. app. 2155(d)).
    Initial distribution letter. A letter that BIS sends to a person 
that has been identified by the U.S. Government as a supplier or 
customer of materials, products or services used for activities of the 
industry that is the focus of a survey. The letter describes the 
survey's primary objectives, how survey results will assist the U.S. 
Government, and the confidential treatment of the information 
submitted. The letter also includes BIS contact information.
    Person. The term ``person'' includes:
    (1) An individual, corporation, partnership, association, or any 
other organized group of persons, or legal successor or representative 
thereof;
    (2) Any State or local government or agency thereof;
    (3) The Government of the United States, of the District of 
Columbia, of any commonwealth, territory or possession of the United 
States, or any department, agency or commission thereof.
    Note to the definition of ``person.'' Paragraph (1) of this 
definition is not

[[Page 41432]]

limited to commercial or for-profit organizations. For example, the 
term ``any other organized group of persons'' may encompass labor 
unions, academic institutions, charitable organizations or any group of 
persons who are organized in some manner. The term corporation is not 
limited to publicly traded corporations or corporations that exist for 
the purpose of making a profit.
    Survey. A questionnaire or other request for information that 
collects detailed information and data to support both the assessment 
of a particular industrial sector or technology and the development of 
a corresponding study.

Supplement No. 1 to Part 702--General Survey Information

    This supplement provides general information about surveys and the 
content of the typical survey. The content of this supplement is purely 
an example of a typical survey, and in no way limits the content that 
may appear in a specific Bureau of Industry and Security (BIS)-issued 
survey. Procedures and content vary from survey to survey, and as such, 
there is no set template to follow. Nonetheless, BIS is offering this 
information as a basic guide to some elements of a survey.

Survey Structure

    Most surveys include the following sections: Cover Page; Table of 
Contents; General Instructions; Glossary of Terms; Organizational 
Information, and sector-specific sections.
    --The cover page typically includes the title of the survey, its 
scope, an explanation of the legal requirement to comply, the burden 
estimate for compliance with the survey, the Office of Management and 
Budget (OMB) control number, and the survey date of expiration.
    --The General Instructions section normally includes process steps 
necessary for a person's survey submittal. These include but are not 
limited to instructions for survey completion, survey support staff 
point-of-contact information, the name and address of the presiding BIS 
official, and instructions for both survey certification and submittal.
    --The Glossary of Terms section explains terms contained in the 
survey. Terms contained in the survey may be unique to the subject 
matter of the industry assessment, and therefore may change in meaning 
from survey to survey. Therefore, it is important to follow the 
specific instructions and defined terms contained in the specific 
survey you receive, regardless of any previous survey you might have 
completed.
    --The Organization Information section requests information related 
to the person in receipt of the survey, including address information, 
the source level of response (e.g., facility, business unit, division, 
corporate consolidated, etc.), point of contact details, and other 
pertinent contact information.
    The survey is generally organized in a question and answer format 
and is presented on an electronic survey system. Each survey is 
specially tailored to collect the specific information requested. 
Therefore, specific detailed information is what should be submitted in 
response to a survey requesting such information.
    --For example, if we ask for a listing of your customers that order 
widget A, your response should not be a listing of your entire customer 
base. Only the information pertaining to customers' ordering widget A 
is responsive to that kind of question.
    Also note that your reply to a survey request is compulsory, unless 
you meet the criteria for exemption set forth in the body of the 
regulation. Therefore, any non-disclosure agreements or similar 
agreements you may have with your customers or clients are not 
applicable to a survey's request for information. Compliance with the 
survey is required by the DPA. Accordingly, compliance with that 
statutory requirement is paramount to any private agreement you have 
with your customers or other parties.
    In addition to the aforementioned sections, each survey contains 
sections tailored to the specific scope of the study, including but not 
limited to Facility Locations, Products and Services, Inventories, 
Suppliers and Customers, Challenges and Organizational Outlook, 
Employment, Operations, Financial Statements, Sales, Research and 
Development, and Capital Expenditures.
    Examples of survey terms.
    Certification: A section of the survey in which a person (an 
authorizing official) certifies that the information supplied in 
response to the survey is complete and correct, to the best of the 
person's knowledge.
    Facility: A building or the minimum complex of buildings or parts 
of buildings in which a person operates to serve a particular function, 
producing revenue and incurring costs for the person. A facility may 
produce an item of tangible or intangible property or may perform a 
service. It may encompass a floor or group of floors within a building, 
a single building, or a group of buildings or structures. Often, a 
facility is a group of related locations at which employees work, 
together constituting a profit-and-loss center for the person, and it 
may be identified by a unique Dun and Bradstreet number.
    Sole source: An organization that is the only source for the supply 
of parts, components, materials, or services. No alternative U.S. or 
non-U.S. based supplier exists other than the current supplier.
    Survey template: The data collection instrument supplied by BIS to 
persons by which survey information is recorded and submitted to BIS. 
The survey is generally organized in a question and answer format and 
is presented on an electronic survey system.
    Supplier: An entity from which your organization obtains inputs. A 
supplier may be another firm with which you have a contractual 
relationship, or it may be another facility owned by the same parent 
organization. The inputs may be materials, products or services.

    Dated: July 10, 2015.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2015-17388 Filed 7-14-15; 8:45 am]
 BILLING CODE 3510-33-P