Document ID: BIS-2010-0037-0001
Agency: bis
Document Type: Proposed Rule
Title: Simplified Network Application Processing System, On-line Registration and Account Maintenance
Posted Date: 2010-11-23T05:00Z

[Federal Register Volume 75, Number 225 (Tuesday, November 23, 2010)]
[Proposed Rules]
[Pages 71376-71378]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-29482]

[[Page 71376]]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 748

[Docket No. 100826397-0346-02]
RIN 0694-AE98

Simplified Network Application Processing System, On-Line 
Registration and Account Maintenance

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Industry and Security (BIS) is proposing to 
implement an on-line registration process for obtaining an account to 
submit license applications and similar documents electronically. The 
current registration process requires paper and facsimile submissions. 
This proposed rule sets forth the information that parties registering 
on-line would be required to provide to BIS and sets forth the duties 
that registered parties would have with respect to keeping information 
in their accounts current.

DATES: Comments must be received by BIS no later than January 24, 2011.

ADDRESSES: Comments may be submitted via to any of the following.
     The Federal e-rulemaking portal, regulations.gov. The 
regulations.gov docket number for this rule is: BIS-2010-0037.
     Via e-mail at publiccomments@bis.doc.gov--refer to RIN 
0694-AE98 in the subject line.
     Mail or delivery to Regulatory Policy Division, Room 2705, 
Bureau of Industry and Security, U.S. Department of Commerce, 
Washington, DC 20230--refer to RIN 0694-AE98 in the comment.

FOR FURTHER INFORMATION CONTACT: Thomas W. Andrukonis, Director, Export 
Management and Compliance Division, Office of Exporter Services, 
telephone 202.482.6393, e-mail tandruko@bis.doc.gov.

SUPPLEMENTARY INFORMATION:

Background

    BIS administers an export licensing program pursuant to the Export 
Administration Regulations. In connection with this program, BIS 
requires most parties to submit license applications, classification 
requests, encryption registrations, License Exception AGR notifications 
and foreign national review requests in connection with the License 
Exceptions APP and CIV (herein ``work items'') electronically via BIS's 
Simplified Network Application Processing (SNAP-R) system. Currently, 
parties must register to use that system via a paper- or facsimile-
based process. BIS plans to replace that registration process with one 
that is exclusively on-line.
    Organizations or individuals who submit work items would be 
referred to as ``filing entities.'' Individuals who act on behalf of 
filing entities would be known as ``individual users.'' For each filing 
entity, at least one individual user would act as an ``account 
administrator.'' An account administrator would be able to submit work 
items on behalf of his or her filing entity and would have additional 
responsibilities within the on-line registration system.
    An account administrator would have the ability to add and remove 
individual users to or from the account of his or her filing entity. 
The account administrator would also be able to designate other 
individual users who are authorized to act on behalf of the same filing 
entity as account administrators or to terminate an individual user's 
account administrator status. The account administrator would be able 
to deactivate the account of an individual user and reactivate the 
account of a previously deactivated individual user. The account 
administrator would be able to update the filing entity's identifying 
information such as name and address and any individual user's 
identifying information such as name and telephone number. The account 
administrator would also be able to reset an individual user's 
password.
    BIS anticipates that once this system is in place, the current 
processes in which BIS employees create on-line accounts for filing 
entities and add or remove new individual users to or from a filing 
entity's account in response to written or facsimile communications 
would cease. Account administrators for filing entities would handle 
routine changes to the filing entities' accounts and BIS personnel 
would become involved only if necessary to protect a government 
interest such as preventing misuse of the SNAP-R system or if necessary 
to assist someone attempting to register on-line or administer an 
account.
    BIS intends to begin operating the on-line registration system on 
the date of publication of the final rule, but proposes to phase in 
mandatory use of on-line registration and account management according 
to the following schedule.

New Filing Entities

    On the effective date of the final rule and for 30 days thereafter, 
an individual registering a filing entity that does not currently have 
a SNAP-R account would be able to use either the existing paper- and 
facsimile-based process or the new on-line registration process 
described in the following paragraph. Beginning 31 days after the 
effective date of the final rule, the on-line registration process 
would be mandatory for all new registrants.

Requirement To Designate an Account Administrator at the Time of 
Electronic Registration

    A person registering on-line for a filing entity that does not have 
a SNAP-R account, will be required to enter all of the identifying 
information for the filing entity including a certification that the 
person is authorized to register the filing entity and to act as 
account administrator for the filing entity as well as his or her own 
identifying information. That person will become the initial account 
administrator for that filing entity.

Deadlines for Designating an Account Administrator If the Filing Entity 
Was Not Registered Electronically

    Filing entities that are registered to use SNAP-R on the effective 
date of the final rule and filing entities that elect to use the paper 
and facsimile based process during the first 30 days following the 
effective date of the final rule would be required to designate an 
account administrator as described below.
    On the effective date of the final rule and for 90 days thereafter, 
any individual user who is authorized to submit work items on behalf of 
a filing entity would be able to continue to access SNAP-R, submit new 
work items and perform any necessary tasks in connection with pending 
work items. In addition, the first such individual user who designates 
himself or herself as the account administrator would be required to 
certify that he or she is authorized to act as account administrator 
and would become the initial account administrator. BIS would inform 
via e-mail all other individual users who are authorized to act for 
that filing entity of the identity of the newly designated account 
administrator.
    During the period beginning 91 days after the effective date of the 
final rule and ending 180 days after the effective date of the final 
rule, no individual user from a filing entity that does not have at 
least one account administrator would be able to access the SNAP-R 
system for any purpose other than to designate himself or herself as 
account administrator for that filing entity and certify that he or she 
is authorized to act as account administrator. As soon as

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one individual user is designated as the account administrator, that 
individual user as well as all of the other individual users from that 
filing entity will regain full SNAP-R access.
    Beginning 181 days after the effective date of the final rule, all 
filing entity accounts for which no account administrator has been 
designated would become inactive. To use the account for any purpose, 
an individual would have to log on to the SNAP-R Web site and furnish 
all of the information that would be required to register a new filing 
entity.

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. 
BIS believes that this rule will not materially affect the burden 
imposed by that collection. Send comments regarding these burden 
estimates or any other aspect of these collections 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 Regulation of the Department of Commerce 
has certified to the Chief Counsel for Advocacy of the Small Business 
Administration that this proposed rule, if adopted in final form, would 
not have a significant economic impact on a substantial number of small 
entities.

Economic Impact

    BIS believes that this rule will reduce the burden on small 
entities. This rule will eliminate the current and archaic practice of 
using a paper and facsimile based process for obtaining authorization 
to submit work items electronically. It will also reduce the time 
between initial submission of registration information and receipt of 
authorization to use the electronic filing system. Finally, the system 
will allow registered filing entities to add or remove individual users 
without waiting for approval from BIS.
    BIS implemented a revised version of its Simplified Network 
Applications Processing System (SNAP-R) in October 2006. The SNAP-R 
system provides a Web based mechanism for parties to submit license 
applications, classification requests, encryption registrations, 
License Exception AGR notifications and foreign national review 
requests in connection with License Exceptions APP and CIV 
electronically and for BIS to respond electronically to each matter. In 
October 2008, BIS made use of the SNAP-R system mandatory except in 
five specified circumstances. SNAP-R is the vehicle through which BIS 
receives most of the submissions for which SNAP-R is available. In 
calendar year 2009, BIS received 27,245 submissions via SNAP-R and 55 
submissions via paper. On-line processing provides advantages to the 
government and to the parties submitting work items through reduced 
processing times.
    Despite these advantages, BIS still requires parties registering to 
use the SNAP-R on-line system and those who need to make changes to 
their accounts to use paper or facsimile transmissions to do so. A 
party wishing to register now obtains a description of the identifying 
information that the party must submit and the text of a certification 
that the party must make from the BIS Web site. The party copies the 
information onto its letterhead and sends or faxes the paper document 
to BIS. BIS personnel then assign a company identification number to 
the filing entity and a personal identification number to each 
individual user identified on the submission and communicate those 
numbers to the appropriate representative of the filing entity and to 
each individual user. A separate letter must be sent or faxed to BIS 
each time a new individual user needs to be authorized to file on 
behalf of the filing entity and BIS personnel issue a new personal 
identification number to that person via telephone or e-mail. Finally, 
a letter must be sent to BIS when an individual user no longer is 
authorized to submit work items on behalf of the filing entity. BIS 
personnel then deactivate that individual user's account.
    Under the procedure envisioned by this proposed rule, a potential 
individual user, representing a filing entity would access a Web page 
where he or she would enter the necessary identifying information about 
himself or herself and about the filing entity which that person 
represents. That individual would also certify on-line that he or she 
is authorized to register the filing entity and to act as account 
administrator for the filing entity. That individual would receive both 
the company identification number and his or her personal 
identification number via e-mail. Upon receipt of those numbers, that 
individual user could submit work items on behalf of the filing entity. 
He or she could also register new individual users for the filing 
entity. Once registered, each such new individual user could log on and 
begin submitting work items.
    The process will be entirely Web based and will not require users 
to purchase hardware or software. Parties who do not have access to the 
Internet would not be affected by this rule because they are exempt 
from the requirement to submit work items electronically and thus would 
not need to register to use SNAP-R.

Number of Small Entities

    BIS does not collect information about the size of the entities 
that submit license applications, classification requests, and related 
submissions via the SNAP-R system. In 2007, BIS made an attempt to 
estimate the number of small entities that would be affected by the 
rule requiring electronic submissions by the following method.
    BIS determined that 1,592 entities sent in two or more submissions 
in 2006 (entities that make no more than one submission per year are 
exempt from the electronic filing requirement). By reviewing public 
information BIS determined that 252 of these entities could not 
possibly be small entities because they had more than $100 million in 
annual sales, had more than 5,000 employees or because they were United 
States government agencies. BIS did not have a basis for determining 
whether the remaining 1340 entities were small entities.
    Because many industries may be involved in exporting, BIS could not 
directly relate its data to the ``Small Business Size Standards Matched 
to North American Industry Classification System'' (the Standards 
Table) published by the Small Business Administration (SBA). However, 
BIS notes that the November 5, 2010, Standards Table designates 
business as small based on either sales or number of employees, 
depending on the industry. The maximum annual sales and maximum number 
of employees listed in that document are $35.5 million and

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1,500, respectively. Both numbers are far below the threshold selected 
by BIS for screening entries as to size. A few entries in the Standards 
Table are based on having no more than million in assets, but these 
entries are financial institutions that are unlikely to be exporting 
the kinds of items that require a specific authorization from BIS.
    Moreover, most of the categories in the Standards Table for which 
the sales limit is relatively high are unlikely to be affected by this 
rule because they are unlikely to engage in export or reexport 
transactions that require specific authorization from BIS. Examples of 
small entities at the higher end of the sales range of the Standards 
Table include: Family Clothing Stores, Food Service Contractors and 
Home Centers--$35.5 million each, Forest Fire Suppression--$17.5 
million, New Single-Family Housing Construction Contractors--$33.5 
million and Gasoline Stations with Convenience Stores--$27.0 million.

Conclusion

    Based on the information that it does know, BIS believes that most 
categories of small entities identified by the Small Business 
Administration are unlikely to be engaged in the kinds of transactions 
that require specific authorization from BIS and thus would be unlikely 
to use BIS's SNAP-R system. The exemption from the electronic filing 
requirement that BIS's rules provide for parties making no more than 
one submission per year and parties that lack access to the Internet 
tend to further exclude small entities from the impact of this rule.
    Significantly, the effect of this rule on all affected entities is 
likely to be a reduction in burden because this rule allows 
implementation of an electronic registration procedure for an existing 
electronic document filing system. In doing so, it replaces an existing 
paper based registration system, allowing parties who need to submit 
documents to BIS to register to do so in less time. Existing provisions 
of the Export Administration Regulations require most parties to submit 
work items electronically. This rule would not change that requirement 
nor would it change any exceptions to that requirement. Parties who 
qualify and who wish to submit work items on paper would not be subject 
to the registration requirement of this rule. However, those who either 
are required or choose to submit their work items electronically would 
no longer be subjected to a paper based registration process before 
they can begin electronic submissions. In addition, once registered 
with an account administration in place, filing entities would no 
longer have to submit information to BIS via paper or facsimile and 
wait for a response from BIS in order to add or remove individual users 
or to update identifying information.

List of Subjects in 15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

    Accordingly, the Export Administration Regulations (15 CFR Parts 
730-774) are proposed to be amended as follows:
    1. 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 12, 2010, 75 
FR 50681 (August 16, 2010).

    2. Section 748.7 is revised to read as follows:

Sec.  748.7  Registering for electronic submission of license 
applications and related documents.

    (a) Scope. This section describes the procedures for registering to 
submit electronic documents to BIS. The procedures in this section 
apply to submission of export and reexport license applications (other 
than Special Comprehensive Licenses and Special Iraq Reconstruction 
Licenses), classification requests, encryption registrations, License 
Exception AGR notifications and foreign national review requests under 
License Exceptions APP or CIV.
    (b) Registration and Use of BIS's Simplified Network Applications 
System--Redesign (SNAP-R). Parties wishing to submit electronically 
must log on to [URL to be determined] to register. Upon initial 
registration, the party (the filing entity) will have to supply the 
name of the entity that will be submitting documents electronically and 
its address and the name, telephone number, facsimile number and e-mail 
address of the person who will act as account administrator. The person 
will be required to certify that the information so supplied is correct 
and complete, that the person has authority to register the entity that 
will be making electronic submissions and that the person has authority 
to act as an account administrator for that entity.
    (c) Role of account administrator. The account administrator is 
able to add and remove individual users to and from the account of the 
filing entity for which it is the account administrator. The account 
administrator can also make individual users account administrators and 
can terminate an individual user's administrator status. The account 
administrator can deactivate the account of an individual user and 
reactivate the account of a previously deactivated individual user. The 
account administrator can update the filing entity's identifying 
information such as name and address and any individual user's 
identifying information such as name, telephone number, facsimile 
number and e-mail address. The account administrator can reset 
individual users' passwords.
    (d) Role of individual users. An individual user may submit to BIS 
export and reexport license applications (other than Special 
Comprehensive Licenses and Special Iraq Reconstruction Licenses), 
classification requests, encryption registrations, License Exception 
AGR notifications and foreign national review requests under License 
Exceptions APP or CIV.
    (e) Effect of submission to BIS. BIS may refuse to accept an 
electronic submission if it has reason to believe that the individual 
user making the submission lacks authority to do so. However, BIS is 
not obligated to conduct any checks to determine whether an individual 
user has the necessary authority and will generally treat users as 
acting within their authority. Acting through their account 
administrators, parties have the ability to remove an individual user 
when that individual user is no longer authorized to make submissions 
on behalf of that party to BIS and should do so promptly.
    (f) Requirement to keep identifying information accurate and 
current--(1) Filing entities. Filing entities must, through their 
account administrators, update their identifying information such as 
name, address and telephone number in their SNAP-R account as necessary 
to keep that information accurate and current.
    (2) Individual users. Individual users must, through their account 
administrators, update their identifying information such as name, 
telephone number, facsimile number and e-mail address in their SNAP-R 
accounts as necessary to keep that information accurate and current.

    Dated: November 15, 2010.
Kevin J. Wolf,
Assistant Secretary for Export Administration.
[FR Doc. 2010-29482 Filed 11-22-10; 8:45 am]
BILLING CODE 3510-33-P